Sun and Sand Ltd v Fitzjohn: 1979

The EAT considered the deduction of sickness benefit from the compensatory award. Arnold J said: ‘The appellants before us say that that amount of sick ness benefit should be deducted from the amount awarded within the compensatory award for the 13 weeks of pay between the date of dismissal and the date of new emp loyment. The matter for consideration seems to us to depend upon whether the amount of the loss sustained by Miss Fitzjohn in consequence of her dismissal was the whole amount of lost pay or was the amount of lost pay less the sickness benefit. If the applicant was entitled to retain the sickness benefit to which she was justly enti tled, so long as her employment continued, in addition to receiving her pay, the loss would in our judgment be the net pay lost without any deductions; but if either she was obliged to accept some reduced amount of pay by reference to the sickness benefit she had received or so long as she was being paid under a continuing contract of employment was disentitled from receiving sick benefit at all, then in either of those cases it seems to us that the compensatory award for lost pay should be reduced by the amount of the sickness benefit which she received. It is not contended by the appellants that so long as her contract of employment continued she would have been obliged to accept any deduction from her wages by reference to the amount of sickness benefit she had received or otherwise obliged to account to her employers for the amount of that sickness benefit. They do however submit that the applicant was not in fact entitled to receive sickness benefit so long as her contract of employment continued and that therefore all that she lost, if she had received no more than she was justly entitled to, would have been the net pay and it would follow from that that, since during the period of unemployment she received in fact sickness benefit, then her loss would be the amount of net pay less the amount of sickness benefit. For this proposition the appellants rely on the language of s.14(1)(b) of the Social Security Act 1975; the relevant part of the sub-section reads thus:
‘A person shall be entitled to unemployment benefit in respect of any day of unemployment which forms part of a period of interruption of employment and to sickness benefit in respect of any day of incapacity for work which forms part of such a period’
and they point out that ‘such a period’ plainly means a period of interruption of employment. So they say she is entitled to sickness benefit only during a period of unemp loyment since this is what ‘interruption of employment’ means, so that if she had continued to be employed by the appellants she would not, so long as that employment con tinued, notwithstanding that she was off work for sick ness, be entitled to sickness benefit. The answer to that proposition is in our judgment plainly contained in the definition which is to be found in s.17(1)(c) of the Social Security Act 1975, which provides that the expression ‘day of interruption of employment’ means a day which is a day of unemployment or incapacity for work. It follows from this, in our judgment, that where a person suffers from an incapacity for work such as that from which Miss Fitzjohn suffered during the relevant period it matters not that she has the benefit of a current contract of employment, in relation to her entitlement to sickness benefit.


Arnold J


[1979] IRLR 154

Cited by:

CitedPuglia v C James and Sons EAT 24-Oct-1995
The EAT considered the effect of the receipt of benefits during a period of sickness when calculating loss of earnings, and whether a hearing was properly conducted without the presence of the parties.
Held: There is no procedural irregularity . .
Lists of cited by and citing cases may be incomplete.

Employment, Damages

Updated: 18 May 2022; Ref: scu.278237