The benefits under the PHI were funded by the inevitable Insurance Policy, which said that an employee would be entitled to benefits if they were ‘incapacitated by an illness or injury which prevents them from performing their Own Occupation’.
Own Occupation was defined as fundamentally the essential duties of that person’s own job.
In October 2012, Mr V went on sick leave and was still absent when, two months later, his employer changed under TUPE (the Transfer of Undertaking Regulations). The new employer arranged for a new insurer to fund the PHI.
Mr V, after an absence of 26 weeks and still unable to work, claimed benefits under PHI, but both insurers refused to pay him because the timing of the TUPE transfer meant that he had not been absent for 26 weeks when the first insurer’s policy came to an end, and was ill before the second insurer was on cover; this second insurer being one which did not cover pre-existing conditions. Eventually, the insurers of the first employer agreed to pay Mr V benefits for one year only, following which he was dismissed on grounds of lack of capability.
The tribunal, in finding Mr V had been unfairly dismissed and discriminated against, also made the decision that the new employer was required to continue paying Mr V until he returned to his original job, died, or reached retirement age.