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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
Matheson
Matheson

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

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

Matheson
Matheson

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