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Pension is seen as a benefit by all and employers can not avoid paying it to those whom they unfairly dismiss [by reason of the employee not being physically fit to work].

In the case of Fox v British Airways plc the claimant’s son (former employee of British Airways) died three weeks after he had been dismissed by the employer because he was physically unfit to work.

Under the employer’s pension scheme, had he died while still employed, a death in service benefit of three times his salary would have been payable. The Court of Appeal decided that “Mr Fox’s estate was entitled to be put in the position that Mr Fox would have been in if he had not been dismissed (subject to a claim) when he was. In that case he would virtually certainly still have been in employment at the date of his death. His beneficiaries would at that point have become entitled to the payment of £85,000. Since that entitlement was to be regarded as a benefit to him he—or his estate—could only be put in the position that he would have been in but for his dismissal if it was put in a position to enable an equivalent payment to be made; and that could only be done by the award of compensation in the full amount.”  

The matter now reverts to the lower court and “the claimant’s loss in relation to death-in-service benefit (in respect of both his claim for disability discrimination, if proved, and unfair dismissal, if established, and in that case subject to the statutory cap) [is] be assessed as three years’ pay, subject to any proper discount in respect of other benefits received.”

Citation: [2013] EWCA Civ 972;  [2013] WLR (D)  330