Can the termination of employment on ill-health grounds be regarded as termination by mutual consent, rather than dismissal?

Potentially yes, held the Employment Appeal Tribunal (EAT) in the case of Riley v Direct Line Insurance Group.

The Claimant had Autism Spectrum Disorder. He was absent from work due to this condition for several years. A return to work was attempted but was unsuccessful. Medical evidence indicated that he would never be able to return to work in his role. The Claimant was informed that, under a permanent health insurance scheme called Pay Direct offered by UNUM, his salary payments would continue to be made up to retirement age if his employment ended. The Claimant sought information from UNUM and then agreed to this proposal. A formal termination meeting was held with him. The letter sent following this meeting referred to him having been ‘dismissed’.

The Claimant brought claims for unfair and discriminatory dismissal and failure to make reasonable adjustments. The original tribunal found that the Claimant had not been dismissed. The termination of his employment was consensual meaning that the claims of unfair and discriminatory dismissal failed. The claim for failure to make reasonable adjustments was found to be out of time and an extension of time was not granted.

The EAT agreed with the tribunal’s conclusions. In particular, the original tribunal had not erred in finding that there was the requisite clear evidence of a free and consensual termination. The EAT found that the original tribunal had gone to considerable lengths to emphasise that the Claimant was not tricked or coerced in any way and that he participated in the discussions, was given time and fully understood what he was doing. The existence of a letter which said the Claimant was dismissed did not undermine this conclusion – the termination was agreed consensually before the letter was written.