Legal Updates

Employment Law – Incapacity Benefit – Compensation Calculation

Recent decisions have provided clarification on how compensation allocated to a claimant that has received incapacity benefit should be calculated. The cases in question are Sheffield Forgemasters International Ltd v Fox; Telindus Ltd v Brading [2008].

It was held by the Employment Appeals Tribunal (“EAT”) that claimants should be able to recover compensation for loss of earnings relating to periods during which they were receiving incapacity benefit. However, the EAT did note that this should be subject to the rule against double recovery.

With regards to incapacity benefit, the EAT stated that the statutory definition of "incapable of work" in the relevant legislation did not mean that the individual had to be unable to carry out any work whatsoever. This is particularly interesting as it was stated that the same approach would apparently apply to any employment and support allowance – A mechanism which is scheduled to replace incapacity benefit.

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© RT COOPERS, 2009. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.