Title

Autem vel eum iriure dolor in hendrerit in vulputate velit esse molestie consequat, vel illum dolore eu feugiat nulla facilisis at vero eros et dolore feugait

Loss of Death in Service Benefit: Can the Estate Claim?

Sometimes quite tragically people depart this mortal coil unexpectedly. Naturally when this does occur there can be unresolved issues regarding their employment benefits, most pertinent may be the payment of a death in service benefit to their estate.

In the recent case of British Airways Plc (BA) v Fox the Court of Appeal dealt with the specific question of whether the estate of an employee who was dismissed and died shortly thereafter could bring a claim for the loss of a death in service benefit which he had enjoyed while in employment.

Mr Fox had suffered a severe back injury and subsequently had been on sick leave attempting to recover. Part of this recovery was an operation, unfortunately he passed away shortly after undergoing the procedure. Prior to his passing he was dismissed by BA on the grounds of ill health capability. It was later alleged that his dismissal was unfair and discriminatory on the basis of his then disability.

While in employment with BA, Mr Fox had been a member of the company’s death in service benefit scheme, under which if he died while in employment, payment would be made to beneficiaries identified by the trustees of the scheme in the amount of three times his annual salary, around £85,000. BA argued that as he had been dismissed by the time he had died, no such payment was due to the beneficiaries.

BA asserted that Mr Fox could never have received the £85,000 had he lived, so he could never have been able to claim for its loss. BA were therefore arguing here then that the loss was suffered not by Mr Fox but rather his beneficiaries, accordingly the estate, standing in his stead, had no claim to that sum either.

The Court of Appeal did however disagree with the argument put forward by BA, with it being stated that there would be fundamental issues with UK employment law if it were the case that an employee was unable to claim compensation merely because the subject matter of the benefit sought was payable to others.

It was found therefore that the death in service benefit was part of Mr Fox’s remuneration for employment and the loss of it was a real loss sustained by him, and so payable to his estate on his death.

Generally where a benefit such as life cover has been lost, the proper measure of damages would be the cost of securing an equivalent benefit at market rate. However, in this rare circumstance, such an approach was not deemed appropriate. Given the known fact of Mr Fox’s death so soon after his dismissal, the value of the lost benefit to his estate was deemed to be the full sum of £85,000.

Conclusion

This clearly demonstrates that the estate of a deceased employee has not only the legal standing to progress claims such as discrimination and unfair dismissal after the employee passes, but can also seek recovery of additional and voluntary benefit payments, as shown here with the death in service scheme.

If you have an on-going employment tribunal claim and need some advice and assistance contact me for a free consultation on 0113 350 4030 or at samira.cakali@scesolicitors.co.uk


Samira Cakali

Samira Cakali is a pragmatic and approachable solicitor advocate with extensive contentious and non-contentious experience in the fields of employment law as well as civil litigation, within a range of commercial businesses from SME’s to multinationals as well as senior executives.

%d bloggers like this: