Employer

The employer is not entitled to reimbursement of sickness benefits in the context of a claim for damages

An aggrieved party who has an unconditional contractual right to sick pay is not entitled to seek reimbursement from their employer as damages in a civil action, the High Court has heard.

In a judgment, Judge Garrett Simons said that a sum incurred by an employer in sick pay will only be recoverable against a third party at fault if the injured party is legally obliged to reimburse it.

An injured party who has been unable to work for a period due to injury is generally entitled to recover lost earnings in a successful personal injury lawsuit. However, a generous sick pay clause in an employment contract could significantly reduce the level of damages that a responsible party would be required to pay.

The judge said employers could protect themselves by writing contracts that say the employee is legally bound to reimburse the amount paid from any compensation received in connection with a personal injury claim.

VHI Healthcare case

Judge Simons handed down the findings in a personal injury case brought by a VHI Healthcare employee who paid him €40,800 for absences due to injuries he sustained in a road accident.

Declan Hynes, of Pococke Valley, Johnswell Road, Kilkenny, sued Kilkenny County Council and its employee, Leo Hogan, of Ballyfoyle, Co Kilkenny, over the incident on December 5, 2011.

Mr Hogan was driving the council’s road sweeping truck which allegedly drove into the path of Mr Hynes’ car, hitting it.

Liability had been admitted by the defendants and the High Court was tasked with assessing damages, including whether Mr Hynes was entitled to recover sick pay to reimburse his employer.

Mr Hynes had a contractual right to 100% of his base salary for up to six months in a 12 month period, the judge noted.

Claim for damages

However, VHI as employer had written to Mr Hynes following his accident asking him to include the €40,800 he had incurred as a result of his absence if he decided to bring an action in damages against a third party. “If your claim is successfully settled, you will be required to reimburse the council,” he wrote.

Lawyers for Mr. Hynes responded to the letter confirming that the costs would be reimbursed to VHI if the claim is successful.

However, this chain of correspondence does not give rise to a legal obligation on the part of Mr. Hynes, Judge Simons said.

A contractual right to sickness benefit, which is not subordinated to an obligation to reimburse the sums paid, cannot be waived after the accident, so that the loss voluntarily assumed would be inflicted on the wrongdoer, he said. declared.

Parties involved in the legal action have agreed that Mr Hynes suffered injuries to his neck and back, but the level of psychological harm suffered has been disputed.

The judge said the psychological impact affected “every aspect” of Mr Hynes’ life, including his prolonged absences from work.

Judge Simons awarded €173,000 in damages, including €70,000 for bodily injury and €45,000 for non-pecuniary damage against the defendants.