I would be interested to see the replies to this, I am not sure of the legalities, but it sounds a bit odd, from my experience of this, because it does happen, but in the couple of cases I have seen the employer paid full pay and classed it as medical suspention, as they where preventing the return to work of the employee, not that the employee is and is done only in extreme cases.
I would be interested to know if he has had any OH input at the outset of his illness or at the very least when he hoped to return in November.
I currently have 6 clients with varing cancers, all apart from one are working, and that is because he is terminal and is trying to get his house in order and adjust from being a very fit young man 5 weeks ago with a bit of weight loss.
I tend to find my clients are very defencive thinking I will recommend sick leave, although due to this terrible run over the last 2 months, they are starting to relax and realise I am a great believer in in the benefit of normality, and you post backs up the fact that by not working this has affected his mental health in a detrimental way.
my advice tend to be that the employer should expect periods of sickness, and increased hospital appointment which will I would recommend are to be accommodated, and those in safety critical jobs I do have to but on a further modification of no operational work, but once I explain why, they are fine about it, as in if they are about to have a operation for instance, if they broke their leg and it needed surgery it could delay their operation for the cancer.
I am truely confused about the "special" treatment bit on phased return as his drop in hours could have been accommodated by using leave if they could not as an organisation do it any other way, but then again I do not know the full facts, but having been of since May last year he would have accrued at the very least 4 weeks leave to use between Dec and April, which could have been used to cut his days down, unless he had all of April off with seems unlikely, but if it is Jan to Dec annual leave system they could of in Nov allowed him to use any leave outstanding to get him to the christmas start date and extended his sick leave intitlement all be it only for a few weeks...imho again is a rum one.
on the leave thing, I always warn my clients it is not unreasonable for the employer to use accured leave but in the main I have found the employer takes it on the chin or meets them half way.
on the plus side at least they have now got a OH, I will watch this space with interest.