Can You Be Made Redundant While on Sick Leave?

Redundancy is a reality for many employees in the UK, with over 100,000 people losing their jobs due to workforce reductions each year. For those on sick leave, the situation can feel even more uncertain and stressful. The question many ask is: Can an employer make you redundant while you are off sick?

The simple answer is yes, but employers must adhere to strict legal procedures. Redundancy should be based on genuine business needs rather than an employee’s illness or absence. If redundancy is handled unfairly or used as an excuse to dismiss a sick employee, it could lead to claims of unfair dismissal or discrimination.

This guide will help you understand your rights, the legal requirements employers must follow, and what steps you can take if you believe your redundancy is unfair.

What Is the Difference Between Redundancy and Sick Leave?

To understand your rights, it’s important to distinguish between redundancy and sick leave. Redundancy happens when an employer needs to reduce their workforce due to a business closure, a workplace shutdown, or a decrease in demand for a certain role. It is not a reflection of an employee’s performance but rather a business decision.

Sick leave, on the other hand, is when an employee is temporarily unable to work due to illness or injury. Employees on sick leave may receive Statutory Sick Pay (SSP) or contractual sick pay, depending on their employer’s policy.

While an employer can make an employee redundant while they are on sick leave, they cannot use their illness as the reason for redundancy. This would be considered discrimination under the Equality Act 2010.

Can an Employer Make You Redundant While You Are on Sick Leave?

Yes, an employer can make an employee redundant while they are on sick leave, but it must be for a genuine business reason. A redundancy situation usually occurs due to:

• The closure of the business or workplace.
• A restructuring process that leads to job reductions.
• A decline in the need for certain job roles.

Employers must ensure the redundancy process is fair and not influenced by an employee’s sickness absence. If an employee is selected for redundancy because of their illness, this could lead to claims of unfair dismissal or discrimination.

What Legal Protections Do Employees on Sick Leave Have?

Employees on sick leave have the same redundancy rights as those actively working. However, additional legal protections apply:

First, employers must carry out a proper consultation before making any redundancy decisions. This means they should hold meetings with affected employees, provide clear reasons for the redundancy, and explore alternative options before proceeding with job losses.

If an employee is on long-term sick leave, the employer must make reasonable efforts to communicate with them during the process.

Second, employers cannot use sickness absence as a redundancy selection factor. Redundancy must be based on objective criteria, such as skills, performance, and length of service, rather than how much time an employee has been absent due to illness.

Third, employees with long-term illnesses may be classed as disabled under the Equality Act 2010. In such cases, employers are legally required to make reasonable adjustments, such as modifying job roles or offering alternative employment, before considering redundancy.

If an employer fails to follow these legal protections, the redundancy could be unfair or discriminatory, and the employee may have grounds for an Employment Tribunal claim.

How Should Employers Handle Redundancy for Employees on Sick Leave?

Employers must take extra care when handling redundancies for employees on sick leave. A fair redundancy process should include:

1. Clear and timely communication: Employers must inform affected employees as soon as possible about redundancy risks. If an employee is on sick leave, employers should make sure they receive the same information as those at work.
2. Reasonable consultation methods:  If an employee is too unwell to attend meetings in person, employers should offer alternative methods, such as video calls, phone meetings, or written consultations.
3. Sensitivity towards mental health conditions: If an employee is absent due to stress or mental health issues, employers should be particularly careful and ensure they provide emotional support and flexibility in the redundancy process.
4. Proper selection criteria: Employers must use fair and transparent criteria to select employees for redundancy. If sickness absence is used as a reason, the redundancy could be challenged as discriminatory.

If an employee cannot engage with the redundancy process due to illness, the employer must document why the process cannot be delayed and ensure they have made every effort to involve the employee fairly.

When Does Redundancy While on Sick Leave Become Unfair Dismissal?

Redundancy while on sick leave can become unfair dismissal if the redundancy process is not handled correctly or if the reason for redundancy is not genuine.

An employer must ensure that redundancy is based on business reasons, not on an individual’s health condition. If an employee is selected for redundancy because of their illness, this could be considered disability discrimination under the Equality Act 2010.

A redundancy is likely to be unfair if:

• The employer targets an employee for redundancy primarily due to their sickness absence rather than legitimate business reasons.
• The employer fails to properly consult the employee, meaning they are not given a chance to discuss the redundancy or explore alternatives. Employees must be informed of the situation and have the opportunity to ask questions and seek clarification.
• The employer does not consider alternative job roles within the company before making a final redundancy decision. If there are other suitable positions available, the employer must offer them before proceeding with redundancy.
• The employer does not make reasonable adjustments for employees who qualify as disabled under the Equality Act 2010. For example, if an employee has a long-term health condition, the employer should explore options like a phased return to work, remote work, or changes to job responsibilities before deciding on redundancy.
• The redundancy process lacks transparency and objective selection criteria. Employers must use a fair scoring system based on relevant factors like skills, experience, and job performance rather than basing decisions on absence due to illness.

If an employee believes their redundancy is unfair, they can challenge the decision by:

1. Raising a formal complaint with their employer.
2. Seeking advice from ACAS (Advisory, Conciliation and Arbitration Service), which can help mediate disputes.
3. Filing an Employment Tribunal claim for unfair dismissal if their employer has not followed the proper redundancy process.

Employment Tribunal claims must typically be made within three months of redundancy. If an employer is found guilty of unfair dismissal, the employee may be entitled to compensation or reinstatement in their role.

Can You Be Dismissed While on Sick Leave?

Dismissal while on sick leave is a complex legal area, and the circumstances of the dismissal determine whether it is lawful or unfair. An employer can dismiss an employee on sick leave, but they must follow a fair and reasonable process.

Dismissal can occur for two main reasons:

1. Redundancy: If an employee is made redundant, the employer must demonstrate that the redundancy is based on genuine business needs rather than the employee’s health condition. If redundancy is being used as an excuse to dismiss an employee due to their illness, this could be considered unfair dismissal or disability discrimination.
2. Capability Dismissal (Medical Grounds): If an employee’s illness prevents them from performing their job, an employer may consider capability dismissal. However, before dismissing an employee for this reason, the employer must take reasonable steps to support their return to work.

For a capability dismissal to be lawful, the employer must:

• Obtain medical evidence, such as a report from an occupational health specialist, to assess the employee’s condition.
• Consider reasonable adjustments, such as modifying job duties, allowing remote work, or implementing a phased return-to-work plan.
• Hold meetings with the employee to discuss their health, recovery prospects, and any possible alternatives to dismissal.
• Give the employee sufficient notice and an opportunity to appeal the decision.

If an employer fails to explore reasonable adjustments or does not follow a fair process, the dismissal may be unfair and open to challenge through an Employment Tribunal.

It’s important to note that if an employee has a long-term illness that qualifies as a disability, dismissing them without making reasonable adjustments could be illegal discrimination under the Equality Act 2010.

Employees facing dismissal while on sick leave should:

• Request written reasons for their dismissal.
• Seek legal advice from ACAS or an employment lawyer.
• Consider filing a claim for unfair dismissal or disability discrimination if they believe their employer has acted unlawfully.

What Happens If You Resign While on Sick Leave?

An employee has the right to resign while on sick leave, but they should carefully consider the potential consequences before making a decision.

One of the biggest concerns is how resignation might affect financial benefits. Employees on Statutory Sick Pay (SSP) or company sick pay may lose entitlement to these payments if they resign before their sick leave ends.

Additionally, resigning voluntarily may impact eligibility for benefits such as Universal Credit or Employment and Support Allowance (ESA). Before resigning, it’s advisable to speak with Citizens Advice or an employment lawyer to understand how resignation may affect income and benefits.

Employees who resign due to ill-health or workplace mistreatment may still be able to claim constructive dismissal. This occurs when an employer’s actions create an unbearable working environment, forcing the employee to resign.

To prove constructive dismissal, the employee must demonstrate that:

• Their employer has seriously breached their employment contract.
• The employee resigned as a direct result of the employer’s actions.
• The resignation occurred promptly after the breach.

Examples of employer breaches that may justify a constructive dismissal claim include:

• Failing to make reasonable adjustments for a disabled employee.
• Discriminating against the employee due to their illness.
• Unfairly pressuring an employee to resign instead of going through a redundancy or dismissal process.

Resigning due to ill health should be a last resort. If an employee is struggling with work due to a medical condition, they should first explore options like reasonable adjustments, flexible working, or medical leave before deciding to resign.

Employees who decide to resign should:

1. Follow their contractual notice period, unless their employer agrees to an early release.
2. Submit a formal resignation letter, clearly stating their reason for leaving.
3. Seek legal advice if they believe they have grounds for a constructive dismissal claim.

If an employee resigns but later believes they were forced out unfairly, they may still have the option to take legal action. An Employment Tribunal claim for constructive dismissal must typically be made within three months of the resignation date.

Conclusion

Redundancy, dismissal, and resignation while on sick leave are complex legal matters that require careful handling. While an employer can make an employee redundant or dismiss them while they are off sick, they must ensure the decision is based on genuine business needs and that all legal protections are followed.

Employees who feel they have been unfairly selected for redundancy, dismissed without a fair process, or pressured to resign should seek legal advice and consider their options for challenging the decision.

If you are facing redundancy or dismissal while on sick leave, don’t hesitate to consult ACAS, Citizens Advice, or an employment solicitor to ensure your rights are fully protected.

FAQs

Can you make someone redundant whilst on sick leave?

Yes, but the redundancy must be for a genuine business reason and follow a fair process. Employers cannot select an employee for redundancy solely due to their sickness absence.

How long can you be on sick leave before dismissal?

There is no fixed time limit, but dismissal for long-term sickness must be fair. Employers must consider medical advice, reasonable adjustments, and alternative roles before terminating employment.

Can you get redundancy due to ill health?

Redundancy is based on business needs, not an employee’s health. However, if an employer is restructuring and an ill employee’s role is no longer required, they may be made redundant following the correct process.

Can I terminate an employee who is on sick leave?

Yes, but only if there is a valid reason, such as redundancy or capability dismissal due to long-term ill health. Employers must follow a fair dismissal process and consider all possible alternatives.

Can you get sacked for being off sick with a doctor’s note?

A doctor’s note provides evidence of illness, but it does not guarantee job protection. An employer can still dismiss an employee if their absence significantly impacts the business and all fair procedures are followed.

Is it better to resign or be made redundant?

It depends on individual circumstances. Redundancy may provide a payout and potential benefits, while resignation is voluntary and may affect eligibility for financial support. Seeking legal advice is recommended before making a decision.

Can I resign while on sick leave?

Yes, you can resign while on sick leave. However, doing so may affect sick pay, benefits, and legal claims. It’s important to follow the correct resignation process and consider seeking legal advice.

How soon after redundancy can I start a new job?

You can start a new job immediately after redundancy unless restricted by your contract’s notice period or a non-compete clause. Redundancy pay is not affected by taking new employment.

Can you refuse to be made redundant?

You can challenge redundancy if you believe it is unfair or not genuine. Employees may appeal internally or take legal action through an Employment Tribunal if redundancy laws are not followed.