Ill-health retirement as an alternative to dismissal

Some employers offer ill-health retirement to employees who become too ill to work. In First West Yorkshire Limited v Haigh (UKEAT/0246/07), the EAT held that where an employee is absent on long-term sickness absence and a pension scheme provides access to an enhanced benefit, the employer has an implied obligation to consider ill-health retirement as an alternative to a capability (ill-health) dismissal. Failure to do this in Mr Haigh’s case was a breach of contract and made the dismissal unfair.