Ill-health cases - common practical problems and related case law 2

Claims for ill health pensions are one of the most contentious areas for pension scheme members, trustees and employers alike. By their nature, ill health early retirement cases are unusually emotive. Where the benefit offered by the scheme is calculated on the basis of enhanced pensionable service to normal retirement date, the additional cost to the scheme can often reach a six figure sum. While ultimately this will be borne by the employer, this may also reduce the scheme's surplus, so it is of concern to both trustees and employers that such benefits are only paid to those who meet the specified criteria. However, determining what that specified criteria is can be a major problem.

Inconclusive medical evidence
Medical evidence provided can often be somewhat inconclusive. However, it is important to ensure that the medical practitioner upon whose evidence the trustees are going to rely is at least asked the right question. In other words, he should be asked whether in his opinion the individual concerned meets the precise criteria set out in the rules.

Interpretation and procedure
Many of the cases that one sees regarding ill health claims concern a precise and technical interpretation of scheme rules. They often relate to whether the ill health concerned has to be of a permanent nature, or whether the terms require the employee to be unable to carry out his existing job or that of a similar type or any remunerative employment at all.

While a failure to ask the right question may cause problems, another scope for attack of a trustee's decision is that the wrong procedure has been followed. In particular, is it the employer or the trustees who have to form the appropriate view as to the member's incapacity?

Furthermore, what sort of records should be kept of trustee decisions?

Timing
There is also, with many of these cases, the issue of the point at which a decision has to be made. Few schemes provide such generous benefits for deferred members as for active members. However, what about the situation where the member applies for ill health shortly after leaving service? What account is to be taken of medical evidence provided perhaps several years after the member's service has terminated?

Pensions Ombudsman
Ill health cases are almost ideal for settlement by the Pensions Ombudsman. They do not, like many of the controversial cases that he has been considered, involve large numbers of members of the scheme or matters of general principle. The Ombudsman offers an easy method for members whose applications are turned down to progress their grievances. While this may not be a comfortable thought for trustees, it does at least result in cases which offer, some, albeit limited, general guidance. Ill health disputes accounted for some 10 per cent of the Ombudsman's determinations for the year 1999/2000 (60 out of 619 determinations).

HARRIS V. LORD SHUTTLEWORTH
Any discussion of ill health benefits probably ought to start with this, which might be considered the leading case on the subject. It is certainly unusual for such a case to reach the Court of Appeal.

Background
Mrs Harris was employed by the National and Provincial Building Society. She was dismissed in 1986 with three months' salary in lieu of notice. By the date of her dismissal, she had been absent from work for twelve months due to back pain and agoraphobia. She had already had a history of absence from work due to various symptoms which her employers had considered trivial. She was dismissed because it was the Society's policy to dismiss employees who had been absent for work for a continuous period of a year. She was informed that she was not, however, eligible for ill health early retirement.

The pension trustees concluded that medical evidence did not support the view that Mrs Harris was incapacitated in order to require the payment of an ill health pension. Furthermore, even if they had thought otherwise, the trustees believed they were precluded from making an award because she had been dismissed rather than had retired.

Rules
Under rule 18 of the scheme rules,

Under rule 19,

Medical evidence
The Society received a letter from its medical adviser stating that:

However, Mrs Harris' GP said that:

The decision
Firstly, the Court of Appeal decided that the High Court judge had been wrong to decide that retirement did not include dismissal. The judge concluded whether the member gave notice of her intention to leave or the Society gave notice dismissing her, the termination could still properly be described as. To reach this decision, the Court had to come to a somewhat convoluted distinction between this and an older unreported case. This was on the basis that under Rule 18 of these rules there was a specific reference to an ordinary deferred pension being payable if a member was not entitled to another pension (i.e. the ill health pension). Without getting into the technicalities of the distinctions, it seems fair to conclude that retirement from service will, in the absence of clear drafting to the contrary, usually be interpreted to include a situation where someone is dismissed on grounds of ill health as well.

As regards what is meant by "incapacity", L J Glidewell said:

The judge decided that the Inland Revenue definition of incapacity, (i.e. ) was of no assistance in interpreting the phrase.

Of more general application, Glidewell LJ summarised as follows what trustees must do to avoid a ruling that an exercise of discretion has been invalidly carried out.

Therefore, the process, rather than the substance, of the exercise of a discretion appears to be the key element.

MIHLENSTEDT v. BARCLAYS BANK PLC
Like Harris v Lord Shuttleworth this case reached the Court of Appeal.

The scheme rules provided that a pension would become payable if the employer, after consulting with its medical advisers, decided that the member was physically or mentally incapable of undertaking any duties, or had suffered a substantial loss of earning capacity, and the condition was likely to be permanent. The employer decided in the light of the facts and on the basis of medical evidence that the member did not meet these requirements.

This was a case where there was . It could not be doubted that the Bank "gave prolonged and conscientious attention" to the case. The High Court and Court of Appeal upheld the employer's decision, but it also discussed an assertion by the Bank that it was under no obligation even to consider an ill health application if it did not wish to.

This is often quoted as one of the leading authorities on the employer's implied duty of good faith to its employees. The Ombudsman has often stressed this position. For example, in Mrs Allen's determination (Case J00359) the employer's consent was required to ill health early retirement and another rule provided that . Nevertheless, the Ombudsman decided that.

DERBY DAILY TELEGRAPH v. PENSIONS OMBUDSMAN

Background
This is a High Court decision from 1999 on appeal from a decision from the Pensions Ombudsman.

Miss Thompson had worked as a reporter for the Derby Daily Telegraph, a title ultimately owned by the Daily Mail. In January 1995, at the age of 50, Miss Thompson gave twelve weeks' notice terminating her employment having been absent from work on sickness grounds for about one month. She regarded herself as having been constructively dismissed. In February 1995, during her notice period, she asked the scheme administrators for early retirement on medical grounds as she had been suffering from a stress related illness.

The scheme administrator replied that such a pension was awarded solely at the discretion of the employer and had to be approved by the group's principal company, the Daily Mail. Miss Thompson was told to contact the managing director of her employer, but she did not at that point press her application any further. In September 1995, her solicitors wrote to the Daily Mail again claiming an ill health pension.

She was again told that she was not entitled to a pension because the employer did not consider it appropriate to pay one. However, later on, during the course of an investigation by OPAS, the employer decided to consider her case on the basis that she was entitled to an ill health pension if she was sufficiently ill, notwithstanding that the employer had decided not to use its discretion under the rules to allow a pension to be paid. In the event, they were not satisfied under the evidence provided that she was unable to undertake some form of employment.

Rules
The rules provided that a member retiring prior to normal retirement date with the consent of the principal company on the grounds of serious ill health should be entitled to an immediate early retirement pension,

Medical evidence
The employer asked the independent medical expert who examined Miss Thompson whether she would be able to take up employment with another employer prior to reaching her normal retirement age. He replied that:

Decision
In the first place, unfortunately, both the Court and the Pensions Ombudsman, decided they did not need to come to a decision on whether, having given notice herself for termination of employment, she was entitled to be considered for a pension.

It would be interesting to know whether the principal company would have been entitled to withhold its consent to a pension even if the member was sufficiently ill to otherwise qualify. However, the Ombudsman came to the conclusion that he did not have to decide the issue of whether Miss Thompson was entitled to have her application for retirement on the grounds of ill health considered since, in the end, it had received such consideration. Furthermore, the employer did not appeal on this point.

Unfortunately, for the employer, having waived this line of argument, (whether intentionally or not) both the Ombudsman and the Court decided that retirement on grounds of "serious ill health" did not mean, as the employer had considered, that ill health had to be so extreme as to prevent the member from earning an income in any alternative way. Although the court agreed that the employer's interpretation was , it decided that it had improbable and impractical consequences.

Firstly, since the question of whether there was retirement on grounds of ill health was a question of fact to be determined by the employer, it concluded that the employer's enquiry as to whether the individual was suffering from such ill health as to make it impossible for him to continue his current employment was unlikely to be a difficult one. The employer knows the demands of a particular job. However, if the employer had to engage in a further enquiry as to whether the member was capable of earning an income, however modest, in some other way, that would be a rather more difficult task. It would include an investigation of the employee's talents and whether or not they might be turned to an alternative source of income.

Secondly, there could be a somewhat anomalous difference between those who were totally unable to work at the outset and those who were assessed as having some reduced earning capacity. If totally unable to work, the employee would get the early retirement pension. If they then recovered to some extent, the trustees had power to vary or suspend the pension. Accordingly, they could provide a reduced pension if the employee was only able to earn a modest income. However, that alternative would not be available if the employee was at the outset able to earn only a reduced income. There was no provision allowing a "partial" incapacity pension.

Therefore, it would seem that in the absence of very clear drafting, ill health will be considered as being unable to carry out one's existing job rather than any job at all, particularly where there is provision to vary the pension once in payment.

KEY v. COURTAULDS TEXTILES

This case, decided by the Vice Chancellor in October 1998, is another appeal from the Pensions Ombudsman. However, somewhat unusually, this was an appeal by the member rather than the employer or trustees.

Background
Mrs Key suffered ill health due to pains in her neck, shoulders and arms which started in the late 1980's and appeared to get worse. Having been off work for a year, and having received advice from the company's medical adviser (who thought it unlikely she would return to the work in the foreseeable future) the company wrote to her in April 1993 stating that, . She was told her employment would end on 2 April 1993 but she would be paid twelve weeks' wages in lieu of notice. She was, however, refused a pension on the grounds that she was not thought to be permanently incapacitated.

The rules
Under the Courtaulds Pension Scheme rules: "A member who has completed two years' service since age 20 and retires owing, in his employer's opinion, to permanent incapacity in mind or body may, in lieu of any other pension, elect to receive an immediate pension under this rule."

Medical evidence
There was much medical advice in existence.

In May 1992, the Company's medical adviser said that:
In February 1993, the medical adviser noted that:

The Court took the view that the purpose of that letter was not to inform the employers that she was permanently incapable of any form of work, only as to her likelihood of coming back to work for them. It was on the basis of this opinion that her employment was terminated.

In June 1996, she wrote to OPAS regarding the number of visits she had made to the company's doctor stating that:

In her complaint to the Pensions Ombudsman, she stated that:

Following the termination of her employment, she underwent an operation to relieve the condition in her neck by relieving a trapped nerve. Following this, her GP stated that:

A further report, in September 1995, by an orthopaedic surgeon was also submitted.

Decision
The Vice Chancellor upheld the Pensions Ombudsman's decision. Again, the point was not taken as to whether the fact that she was dismissed took her outside the rule requiring retirement owing to incapacity. However, perhaps in the light of the case, it was not worth pursuing.

The problem for Mrs Key was not whether or not Courtaulds and the Ombudsman had come to the "right" decision in her case, but whether no reasonably objective person could have taken the evidence as sufficient to justify the finding made, or that there was in fact no evidence at all to support it. The Ombudsman concluded that the medical adviser had to decide at the time of her dismissal whether she was permanently incapacitated and inform the employer accordingly. From the information before him, the doctor had decided that she was not permanently incapacitated. The Ombudsman had concluded there was no evidence to suggest that decision was perverse and, once this decision had been taken, any subsequent medical evidence was of no relevance.

Mrs Key had admitted herself that the doctor had said she would be fit for work within two years. The later medical evidence consisted of reports after she had undergone a further operation. It was not clear whether the experts who wrote those reports believed she had suffered from permanent incapacity when she left service. They were directed to the condition of Mrs Key following the operation. It may be that the condition was the same as when she left employment, but the Court decided they could not read the letters as being particularly directed to that.

It is difficult not to feel some sympathy for Mrs Key. There is no doubt that she was suffering from ill health and the evidence would seem to point to her condition being the same but generally deteriorating. However, it would seem that having got sufficient medical evidence at the time of her dismissal and having come to a decision on the basis of that, the fact that in the fullness of time it might become clear that she might not work again, was not enough to actually entitle her to an ill health pension.

LAW DEBENTURE v. MALLEY
This was an appeal from the Ombudsman by the independent trustee of the Swan Hunter Pension Scheme after the employer had become insolvent.

Background
On 19 May 1993, Mr Malley, who was a plater, was injured in a shipyard accident. On 25 May 1993, he applied to his employer for early retirement on grounds of incapacity. Three days later, he, along with most of his fellow employees, were made redundant. This was clearly not a situation where the individual was made redundant on ill health grounds.

Perhaps unsurprisingly in the circumstances, the employer did not respond to his application. However, in November 1993, he raised the issue again and followed that up with a letter from his GP in January 1994. Finally, on 3 February 1994, the employer wrote to reject his application.

The matter was then taken up on Mr Malley's behalf by OPAS. Law Debenture became the independent trustee to the scheme in 1995 and proceeded to investigate Mr Malley's claim on its merits. In May 1995, Mr Malley had an operation on his spine and Law Debenture asked the hospital for an opinion on him. Originally, the opinion given was that it was too early to give an opinion at all, but eventually an opinion was forthcoming. In July 1996, Law Debenture decided to place Mr Malley and his wife under covert surveillance for six days. It was stated that the surveillance was not to prove that Mr Malley was lying about his condition, but to confirm the decision that Law Debenture had already come to on the basis of the evidence so far. Surveillance was arranged in order to ensure that he was not treated unjustly by the lack of positive evidence from the doctors of his permanent incapacity. On the basis of this, a resolution was finally passed in July 1996 rejecting his application.

Rules
Rule 5 of the scheme rules provided that:

Incapacity was defined as "physical or mental incapacity which prevents a member from following his normal occupation and seriously impairs his earning capacity. The trustee's decision (reached after receiving medical evidence and after consultation with the employer) as to whether or not a member is incapacitated will be final."

Medical evidence
In February 1996, nearly twelve months after his operation, the registrar advised that:

In May 1996, a full twelve months after the operation, the registrar still said that he did not think he could declare whether he was fully incapacitated. He concluded that they would have to wait a while longer, at least one year or maybe two.

As the pension scheme was being wound up, some decision had to be made and Law Debenture decided to reject the ill health pension.

Pensions Ombudsman's determination
The Pensions Ombudsman found in favour of Mr Malley in the most strident terms. He noted that Mr Malley only had to show incapacity which prevented him from working as a plater and that that seriously impaired his earning capacity. There was no need to demonstrate any degree of permanence. The employee had managed to get another job as a clerk but this paid less than GBP 9,000, about GBP 3,000 less than he had been earning.

Although he noted that the specialists prevaricated regarding whether he complainant was incapacitated, he did not think it was clear that they realised his condition did not have to be permanent. The Ombudsman took the view that the trustees were in receipt of evidence to demonstrate that at the least it was likely that he could not work as a plater, but the trustees preferred to draw conclusions from the private investigator's video in preference to the medical opinion.

The Ombudsman viewed covert surveillance as an unwarranted intrusion into the member's personal life. He noted that:

As a result, he ordered the trustees to obtain further medical evidence from an independent and appropriately qualified expert and to reconsider the application in the light of that advice. He also awarded the member GBP 2,000 for the distress caused by finding that Mr and Mrs Malley had been placed under surveillance.

High court
As in , the point at issue was whether Law Debenture's decision had been perverse, i.e. a decision which no reasonable body of trustees could arrive at.

The Court decided that the trustees could not be criticised for making the decision at the time they did and on the basis of the evidence that they had. The point to be considered was whether at the date of the resolution of the trustees, namely 26 July 1996, in respect of Mr Malley's condition as at 25 May 1993, he was suffering from incapacity which prevented him from following his normal occupation and seriously impaired his earning capacity. The Court took the view that while the evidence might have suggested that Mr Malley could not perform his normal occupation, there was nothing at that point which demonstrated his earning capacity was seriously impaired.

Furthermore, the Court decided that covert surveillance was a quite legitimate course to pursue on appropriate occasions in the investigation of claims. Therefore, this did not in itself amount to maladministration.

CASE E00420 - TRUSTEE PROCEDURE

In this case, the member had injured his shoulder at work. He was expected to make a full recovery, but did not do so. Instead, he was dismissed for being unable to attend work some 18 months later.

The trustee originally refused the member's application for an ill-health pension. He did not challenge the decision for three years because he did not feel he had enough medical evidence and his injury was still being treated. He did not believe the trustee had taken account of medical reports provided on his behalf but had relied on the report prepared by the company medical officer, Dr MJT. The Ombudsman summarised his approach as follows:

This case highlights the need for trustees to gather sufficient medical evidence rather than simply rely in all cases on medical reports prepared at the behest of the employer (although the responsibility for gathering medical evidence will vary depending on scheme rules). The fact that the DSS had assessed the member as disabled "ought to have carried some weight" in the view of the Ombudsman. The Ombudsman concluded that he could not effectively substitute his view of the medical evidence and remitted the matter to the trustees for further consideration.

CASE D11942 - Policy decisions

The complainant in case D11942 saw a specialist on 14 June 1990, was made redundant on 22 June and was registered as blind in July. The trustees refused to consider his application for an ill- health early retirement pension in 1991. They had taken an incorrect view of their ability to grant ill-health pensions under the scheme rules. They also refused to consider the application on the grounds that they would only consent in "exceptional circumstances". The Ombudsman took the following view:

The case suggests that it would be difficult for trustees to suddenly decide that too many ill-health pensions were being granted and therefore should in future only be granted in extreme cases.

It is also interesting to note the Ombudsman's view that trustees ought to have guidelines relating to ill-health pensions to ensure consistency. Although introducing such guidelines may help to avoid maladministration, the trustees' failure (for example in case D12009) to ensure compliance with the procedure laid down for ill-health pension applications can also be held to be maladministration.

EXERCISE OF Discretion or FINDING OF fact?

GEC case
In case F00414 involving the GEC Pension Plan, a member complained that the trustee had not properly considered his application for an ill-health early retirement pension following previous directions from the Ombudsman.

The Ombudsman concluded that the trustee had still not properly complied with the procedure under the scheme rules and therefore decided to treat the complaint as a dispute of fact about whether the member fulfilled the medical criteria under the rules. The Ombudsman arranged for an independent medical examination to be made. He found as a matter of fact that the member did satisfy the incapacity test and ordered an ill-health pension to be paid.

This is an example of the Ombudsman substituting his decision for that of the trustees. He believes he can do this provided it is not a discretionary decision. Where it is a factual decision he can rely on his powers under the Pension Schemes Act 1993 to determine questions of fact.

British Steel case
Another example of the distinction between a factual and discretionary decision being applied was in a determination concerning the British Steel Plan. A member alleged that his applications for an incapacity pension had been improperly rejected and that the failure to give reasons for this decision was maladministration. The trustee argued that it was not policy to disclose to the member the reasons for that decision or the nature of the advice given by the doctor involved.

The Ombudsman held that under the scheme rules the granting of an incapacity pension was a decision of fact rather than a discretionary decision. The trustee's failure to provide an adequate and proper explanation of its reasons for the rejection of the member's five applications, despite requests from the member to do so, fell appreciably short of the standards of good administration. The Ombudsman ordered that the case be reviewed by the trustee. The deliberations were to be minuted in sufficient detail, including (if appropriate) the reasons for any subsequent decision not to seek an independent medical examination and/or to decline the complainant's application, and disclosed to the member. In any event, the trustee had to pay the member GBP 100 for the distress caused in the refusal to give a proper explanation for the earlier rejection of the application.

This decision harks back to other determinations where he suggested that deliberate failure to record reasons for decisions could amount to maladministration.

EXCLUDING RISKY CASES
1. Consider Exclusion
Where a scheme provides an enhanced service ill health pension, employer and trustee may be concerned at taking on known "bad risk" cases, either a new employee with a health condition or such an employee who did not join when first able. Some schemes require medical evidence before members are allowed to join after a particular age.

2. Disability Discrimination Act 1995
The Disability Discrimination Act 1995 introduced a specific non- discrimination rule into UK pension schemes. Essentially, schemes cannot be operated in the manner which discriminates against the disabled. However, there is a significant exception to this. Schemes can exclude disabled members from death or retirement benefits if, by reason of their disability, the cost of providing the benefit is likely to be "substantially greater" than it would be for a comparable person without the disability. Obviously, it is open to argument as to what constitutes "substantially greater". It would have been helpful if the Act tried to define this by reference to percentages at least. Nevertheless, if a member had a disability which was likely to result in a greater likelihood of taking ill health early retirement or that he was more likely die in service, it should be possible to obtain actuarial advice that the benefits would cost substantially more to provide for him than an employee in normal health.

Although the Act would appear to allow schemes to exclude the disabled from scheme membership altogether on this basis, a more common, and more justifiable, approach is to allow such an individual to enjoy normal pension benefits, but to restrict life cover or ill health benefits.

ILL HEALTH PROCEDURE
The aim of trustees, or the employer, in dealing with any ill health case, should be to produce a decision which cannot be challenged. This is clearly much easier said than done but there are a number of lessons that can be learned from the many cases that have gone wrong. The following might be considered as a (non-exhaustive) list of do's and don'ts.

1. Obtain medical evidence which meets the criteria in the rules. Give a copy of the rule to the relevant medical practitioner.
2. While the trustees need not accept the evidence of the member's own GP, it must at least be properly considered.
3. If there is conflicting evidence between an employer and member's advisers, the Ombudsman may find that independent medical advice should be sought (Case J00047).
4. While it may be appropriate to provide summaries of medical evidence to the trustees, they should receive the full medical reports as well. It may avoid a finding that the summary was inaccurate and therefore a decision to re-open if it can be shown that the trustees are given full information.
5. Try and keep away from the trustees any matters which may be found irrelevant to their deliberations, e.g. prior disputes between employer and member not related to his health. Even if the trustees say they did not take this into account, the Ombudsman may feel their decision is tainted by the information.
6. If a member uses the scheme's internal dispute resolution procedure to appeal, consider giving the member the opportunity to address the trustees (with representation) if he so wishes. It would not be appropriate for the trustees to allow him/her to be present while they discussed the case, but giving a fair hearing should make it more difficult to challenge a decision on its merits.
7. It may be better for minutes to make it clear what documents were presented to the trustees and to give an indication of how the trustees came to a conclusion. The risk of merely recording whether or not a pension would be granted is that it may make it more difficult to assure the Ombudsman that they have acted correctly.
8. Consider whether it might be helpful to have a medical practitioner attend the trustee meeting itself.
9. Try to deal with the matter expeditiously. This may mean the use of a sub-committee of trustees rather than a full board. In one case, seven months was held to be too long to consider a case. The member had been made redundant in the meantime, but the ill health pension was awarded on the basis that if the trustees had acted with proper speed he would have received an ill health pension.
10. But remember it will usually be the member who has to apply for a benefit. There is no duty on the trustees or employer to advise of an ill health alternative e.g. where redundancy may be a possibility.

AMENDING ILL HEALTH PROVISIONS
An employer concerned at the cost of ill health benefits may look at amending the existing pension scheme provisions.

One increasingly common provision is to include a two tier ill health rule, with "total incapacity" (i.e. permanent inability to carry out any form of remunerative employment) warranting a pension based on a service enhancement and "partial incapacity" (i.e. permanent inability to carry out current or similar employment) warranting a pension with no enhancement but perhaps no actuarial reduction for early payment either.

Most, but not all, schemes also have a provision allowing reduction or suspension of pensions if the member's condition improves or if they are again able to carry out remunerative employment. Introducing such a term should not be a problem for those in service, but would not be possible for those already retired.

If introduced, there also should be some policy on policing such suspension provisions. This could involve a periodic re examination, although perhaps this should be limited to certain "difficult" cases. In many schemes, this provision is probably not invoked and would only be used if a particular case was brought to the trustees' attention.

Strengthening the qualification for early retirement for active members is probably possible. This is a contingent benefit and so could be seen as analogous to death benefit. There would not be a problem under Section 67 of the Pensions Act 1995 since the member's accrued rights before and after the change would be of the same value. However, the trustees may be reluctant to deprive a member of a pension who for, let us say, 20 years has accrued service on the basis of one definition of ill health only to find it is suddenly removed shortly before he falls ill and could benefit from it.

MERGERS AND ACQUISITIONS
Ill health cases should not be forgotten on company or business sales and acquisitions. The problem is not with pensions in payment but with applications that are pending and therefore may not be funded for. A purchaser may seek a warranty not only that there are no claims pending, but also perhaps that no one is currently off work due to sickness for more than a short period. There may not be much that can be done about such individuals, but at least one might be forewarned and seek to investigate further. Remember, an employee who is off work will still transfer under TUPE.

If one is acquiring a scheme and there are ill health cases pending, one might be able to obtain some form of indemnity if there is an anticipated extra cost to the fund.

If there is to be a bulk transfer between schemes with an interim period of participation in the old scheme, protection may be sought for retirements during the interim period. The cost of any early retirements during this period is often specified to be met by an additional contribution by the purchaser. This may be felt unfair if there are pending applications and perhaps the new employer has no power under the rules to assess ill health. Alternatively, if power to determine ill health falls on the member's current employer and there is no commercial agreement for the purchaser to bear additional costs, this might form a temptation for a purchaser to dispense with the services of ailing employees at no cost to itself.