ICTS (UK) Ltd v Anthony Visram
| Jurisdiction | England & Wales |
| Judge | Lord Justice Bean,Lord Justice Baker,Lord Justice Phillips |
| Judgment Date | 20 February 2020 |
| Neutral Citation | [2020] EWCA Civ 202 |
| Date | 20 February 2020 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2019/1410/EATRF |
[2020] EWCA Civ 202
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
THE HON MRS JUSTICE SLADE
UKEAT/0133/18/BA
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Bean
Lord Justice Baker
and
Lord Justice Phillips
Case No: A2/2019/1410/EATRF
Michael Duggan QC (instructed by Jones Chase Employment Lawyers) for the Appellant
Oliver Isaacs (instructed by O H Parsons LLP) for the Respondent (Claimant)
Hearing date: 12 February 2020
Approved Judgment
This is an appeal from a judgment of the Employment Appeal Tribunal (Slade J sitting alone), affirming the remedy decision of an employment tribunal (Employment Judge Vowles and two lay members). It turns on the proper interpretation of a provision about long term disability benefit (“LTDB”) which formed part of the Claimant's contract of employment.
Anthony Visram commenced employment on 4 May 1992 with American Airlines as an International Security Coordinator at Heathrow Airport. The terms of his contract with American Airlines were transferred to the Appellants, ICTS (UK) Ltd, in accordance with the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”), at which time Mr Visram was responsible for security operations at Heathrow.
The Booklet
The Claimant's “Statement of Terms and Conditions of Employment” with American Airlines included a “Pension and Death and Disability Benefits Plan”. The Death and Disability Benefits provided included:
“a long-term disability plan that, when integrated with public disability benefits, will pay an annual payment of two thirds of salary at the time of disability.
…
Information on this Benefit plan, including eligibility requirements, benefit levels and administrative procedures are to be found in the Company's booklet, “Employee Retirement, Death and Disability Plans”.”
Section G of the Members Explanatory Booklet (“the Booklet”) set out the details of the Long Term Disability Benefits (“LTDB”) [emphasis added]:
“(G) LONG TERM DISABILITY BENEFITS
Should you be absent from, and unable to, work due to sickness or injury for a continuous period of twenty-six weeks or more, you will receive a Disability Income of 2/3rds of your Base Annual Salary less the State Invalidity Pension.
The disability income will commence twenty-six weeks after the start of your absence. It will continue until the earlier date of your return to work, death or retirement.
The disability income is treated as normal pay and is subject to the necessary PAYE deductions. Any long-term benefits that you receive from the State will be payable directly to you and not via the Company.
All Employees
During the period that you receive disability income you will remain a member of the UK Life Assurance Plan and will be covered for the appropriate death-in-service benefits.
Pension Plan Members
During the period that you receive disability income you will remain a member of the UK Pension Plan and your own and the Company's Contributions will be based on your disability income.”
The Insurance Policy
American Airlines had insured their liability to pay LTDB by an insurance policy (“the Insurance Policy”) with Legal and General Assurance Society Ltd (“L&G”). Employees of American Airlines were not parties to the Insurance Policy. The Insurance Policy was the L&G Group Income Policy. It was referred to in the introduction to the Booklet:
“The Long Term Disability benefits are provided by an Insurance Policy.”
The Insurance Policy defined a “Disabled Member” as an “Insured Member” who:
“…at any time,
(i) in the opinion of Legal & General, is incapacitated by an illness or injury which prevents him from performing his own occupation, and
(ii) continues to be in Employment, and
(iii) is not engaged in any other occupation, other than one which gives rise to payment of a partial benefit.”
For the purposes of (i) above
(a) “own occupation” means the essential duties required of the Insured Member in his occupation immediately prior to the commencement of the Deferred Period, and
(b) The Insured Member's capacity to perform the essential duties of his own occupation will be determined whether or not that occupation remains available to him.”
The Insurance Policy set out the following in relation to the duration of the Benefit:
“Duration of Benefit
Subject to production to Legal & General of evidence of the Insures Member's entitlement to benefit, in such form and at such times as Legal & General may reasonably require, and to the remaining provisions of this Section, payment of Member's Benefit will continue so long as the Insured Member is a Disabled Member but not in any event after Benefit Termination Date or, if earlier, the death of the Insured Member.”
Part 4, Clause 1 of the Insurance Policy provided:
“Regardless of anything in these provisions to the contrary the insurance under this Policy of an Insured Member will terminate: immediately in the event of an Insured Member ceasing to be in Employment…”
The Claimant's absence from work and dismissal
Save for a brief period between 18 March and 19 April 2013, Mr Visram was off work from October 2012 with depression and work-related stress until his dismissal on 14 August 2014. While he was on sick leave, his employment was transferred to ICTS under TUPE (on 1 December 2012). The new employer arranged for the LTDB scheme to be insured with Canada Life rather than L&G. The Claimant's contractual sick pay expired in April 2013 and he made a claim for LTDB.
L&G refused to indemnify the Respondent for LTDB payments on the basis that the Claimant's employment had transferred to the Respondent before the completion of a “deferred period” under the terms of the Insurance Policy. Canada Life refused to indemnify the Respondent on the basis that the illness occurred before the inception of its policy. After a dispute about the Claimant's entitlement to LTDB, L&G agreed on 16 September 2013 to pay the Claimant LTDB until 30 September 2014 (backdated so that payments started in April 2013).
The Claimant had raised a grievance about ICTS' non-payment of LTDB on 14 February 2014. The company dismissed his grievance on appeal on 11 June 2014. The Claimant attended a medical capability hearing on 17 July 2014 and was dismissed on 13 August 2014. An internal appeal was dismissed on 18 September 2014. L&G continued to pay the claimant LTDB until 30 September 2014. ICTS paid the Claimant LTDB on a “without any admission of liability” basis for a period of time after that but such payments have ceased.
The proceedings
Mr Visram issued a claim for unfair dismissal and...
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