Can an employee work whilst in receipt of sick pay?

Mr McCann was employed part-time by Clydebank College as a lecturer in motor engineering. He was obliged to work 26¼ hours per week, of which normally a maximum of 18 hours would be by way of “class contact”. Of the remaining 8¼ hours, 3½ were categorised as “discretionary time”. He was on “cycle 1”, under which all his class contact time would be on Monday, Tuesday or Wednesday. Mr McCann owned a garage, the Western Test Centre, in Drumchapel, in which he worked when he was not at the college. He was obliged under his contract to obtain the Respondent’s approval for any such outside work. He had not done so, but his interest in the garage, and the fact that he worked there, was common knowledge among his colleagues.

From 2 October until 18 December 2006 Mr McCann was off work on account of illness. The medical certificates produced by his GP said that he was unfit to work as a result of “stress and hypertension”. Throughout that period he was in receipt of sick pay.The College came to suspect that during the period of Mr McCann’s sickness absence he had been working at the Western Test Centre during hours when he would normally have been obliged to be at the college. This was believed to be inconsistent with his receipt of sick pay. Surveillance was carried out at the garage in the week 11-15 December. The DVD evidence showed him at the garage on Tuesday to Friday of that week. On both the Thursday and the Friday, he was clearly involved in working activities but the time he spent there on the Tuesday and Wednesday was much shorter and it was not clear from whether he was doing any work, although he was wearing what looked like working clothes.

Following a formal investigation and a disciplinary hearing Mr McCann was dismissed for gross misconduct. The relevant misconduct for present purposes was defined as “working for financial gain while drawing sick pay from the College”.At the end of a very lengthy hearing, the employment tribunal declared the dismissal to be fair, having accepted the College’s argument that it was reasonable to conclude from the evidence that Mr McCann had been working during times that he was employed to work for the College.

Whilst many arguments were considered during both the original tribunal hearing and on appeal, perhaps the most interesting was the question as to whether an employee can work whilst in receipt of sick pay. The EAT addressed this issue, even though it was not necessary for them to do so. The views expressed, though not binding, may well be strongly persuasive as they were delivered by Mr Justice Underhill, the President of the EAT.Taking as his starting point that the employer had no knowledge of the work and hadnot given consent to it, he made the following points:

  1. Typically, where an employee is contractually required to work for his employer in a particular period, he cannot work for someone else in the same time.
  2. This default position is not altered where the employee is unable, through sickness, to work in the period in question.
  3. Whilst the employer loses nothing if the employee uses the time to do other work, he has a legitimate aim in prohibiting its use for other remunerative work
  4. the other work undertaken may hinder the employee’s prospects of a speedy recovery
  5. the basis on which sick pay is paid is that the employee is in fact unable to earn
  6. In a clear-cut case we think that it would be well understood by employees that they could not legitimately expect to exploit their illness by being paid twice for the same period and that to do so might constitute serious misconduct.
  7. However, not all cases are clear-cut. Where there is room for ambiguity or innocent misunderstanding it may well be unreasonable for an employer to dismiss an employee for undertaking paid work during a period of sickness absence.

There are many employees who work part time for more than one employer, sometimes undertaking very different types of work. In Mr McCann’s case, whilst he argued that he was not working during the hours he was obliged to work for the college, and that the activities he was involved in were not inconsistent with the reasons for his absence, the tribunal found as a matter of fact, the opposite to be the case. So, can an employee be unfit to work for the primary employer and receive sick pay, but fit to work for the secondary employer? A logical extension of the reasoning given by the EAT would be, yes. In the absence of knowledge and consent from the primary employer, the employee’s actions will be suspicious, but may not amount to misconduct. Clearly, if the primary employer is aware and has given consent, the employee could work at any time, though sick pay would then not be payable.

McCann v Clydebank CollegeUKEATS/0061/09/BI, 17 June 2010