At what point, if any, does an employee’s employment cease when they are out on permanent health insurance (PHI)? Background: An employee with a serious medical condition is out on sick leave with little or no prospect of returning to work in the medium term. The Company pays full salary for 6 months, at which point PHI takes over. The employee remains on payroll and the cost is met by the PHI but still with little prospect of returning to work. Do they remain an employee until pensionable age?

Posted in : First Tuesday Q&A ROI on 2 November 2010
Issues covered:

An employee on PHI remains an employee until his/her employment is terminated. Subject to our comments below, an employer is entitled to terminate an employee’s employment where the employee is no longer capable of performing the work for which he/she was employed.

However, evidence must be provided to the employee that there is no reasonable prospect of the employee returning to work, and presented to the employee before making a decision to dismiss. However, where there is a contractual entitlement to PHI, there is potential for a breach of contract claim by the employee, if his/her employment is terminated by reason of the long term disability, and as a consequence, the entitlement to

Already a subscriber?

Click here to login and access the full article.

Don't miss out, start your free trial today!

Are you fully aware of the benefits of Legal-Island's Irish Employment Law Hub? We help thousands of people like you understand how the latest changes in Irish employment law impact your business through a mix of case law analysis and in-depth articles. All delivered right to your inbox.

We help you to understand the ramifications of each important case from Ireland and Europe.

We help you ensure that your organisation's policies and procedures are fully compliant with Irish law.

You will receive regular updates on Irish employment law including case law reviews, legislative changes, topical updates as well as answers to your burning questions through our Q&A feature.

You will have 24/7 access to the Employment Law Hub so you can research case law and HR issues when you need to.

Already a subscriber, now or Start my free trial today

Back to Q&A's This article is correct at 02/09/2015

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.


The main content of this article was provided by Matheson. Contact telephone number is +353 1 232 2000 or email

View all articles by Matheson