Jurisdiction(s):
United Kingdom

Key definition

Unfair dismissal definition

What does Unfair dismissal mean? In practice, unfair dismissal describes an employee’s statutory claim that their employment was terminated without a fair reason and/or a fair procedure. In England & Wales and Scotland it is governed by the Employment Rights Act 1996; in Northern Ireland by the Employment Rights (Northern Ireland) Order 1996; and in Ireland by the Unfair Dismissals Acts 1977–2015. Employers must show a potentially fair reason (conduct, capability, redundancy, statutory restriction, or some other substantial reason) and that dismissal fell within the range of reasonable responses after a reasonable investigation and a fair process. In Great Britain, compliance with...

PHI Appeal: Does the Incapacity Implied Term Bar Dismissal?

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Q&As

You may wish to consider separately:

the implied term
the fairness of a dismissal which prejudices Permanent Health Insurance (PHI) rights, under the statutory law on Unfair dismissal

Where PHI benefits depend on employment continuing, the High Court has implied a term preventing dismissal during incapacity, save for Summary dismissal (Gross Misconduct) or another compelling ground (eg redundancy). In Briscoe v Lubrizol, the Court of Appeal signalled a broader carve-out, permitting dismissal for ‘reasonable and proper cause’.

Even so, such a term is not always to be implied. In Lloyd v BCQ (EAT) no implication was made where:

a later written contract omitted any reference to the PHI scheme and contained an entire agreement clause
there was, overall, no contractual entitlement to scheme benefits
the contract expressly permitted dismissal for prolonged illness

For more detail, including reconciling Briscoe and Lloyd, see Practice Notes: Dealing with long-term or chronic sickness—Consider any Permanent Health Insurance (PHI) scheme; and Contractual notice—Dismissal during long-term incapacity. Also see Harvey AII[476]–[476.03] and DI[1273]–[1273.02] on PHI and notice/capability.

LexisNexis Employment are not aware of any case law on whether an employer may terminate employment while an employee appeals a provider’s decision to cease PHI benefits...

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Web page updated on 27/05/2026

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