May 4 2005 Employment Law Enews

In this edition we look at the issues surrounding holiday pay for workers on long term sick leave and unfair dismissal claims, plus details of our upcoming Employment Debate.

NO HOLIDAY PAY FOR WORKERS ON LONG-TERM SICK LEAVE

You may remember the controversial decision of the Employment Appeal Tribunal ("the EAT") in Kigass Aero Components v Brown (2002) ("the Kigass case"). In the Kigass case, the EAT decided that workers who had exhausted their entitlement to contractual and statutory sick pay could claim holiday pay, notwithstanding that they were still absent from work. The EAT held that even though the right to paid leave under the Working Time Regulations 1998 ("the Regulations") attached to 'workers', it was not necessary for the worker to have attended work or for some work to have been done.

In the recent case of Commissioners of Inland Revenue v Ainsworth & ors, the Court of Appeal had to consider the EAT's decision in the Kigass case. The claimants were all absent from work on long-term sick leave. They brought tribunal claims seeking to establish that their entitlement to paid holiday under the Regulations endured even while they were not attending work.

The Court of Appeal overturned the EAT's decision in the Kigass case. The Court found that the EAT should have looked at the meaning of the word "leave" rather than the meaning of the word "worker". The Court concluded that the word "leave" connotes a release from what would otherwise be an obligation. They agreed with the Inland Revenue that a worker who is off work for a year or more as a result of serious illness cannot be seen to have taken "leave" during some arbitrarily chosen part of that period. The purpose of the Regulations is to ensure minimum health and safety standards in relation to working time, so that workers can expect a minimum period of release from the pressures of work. Allowing a worker to claim paid annual leave whilst he/she is on long-term sick leave would be a windfall for the worker and do nothing to further the interests of health and safety.

The Court also had to consider the EAT's decision in the case of List Design v Douglas (2002) ("the List case"). In this case, the EAT decided that failure to pay holiday pay amounts to non-payment of wages. This meant that workers could claim unlawful deductions from wages under the Employment Rights Act 1996 ("the Act") in an employment tribunal if their employers failed to pay holiday pay. The EAT's decision in the List case had 2 consequences:

1. Firstly, workers were allowed to recover pay for holiday accrued over a number of years when the employer failed to make payment (this would amount to "a series of deductions" from wages under the Act); and

2. Secondly, it allowed workers to circumvent the operation of Regulation 30 of the Regulations, which states that claims must be brought within three months of the initial breach of the right to annual leave. The workers would be able to claim holiday pay accrued over a number of years as long as they issued a claim within 3 months of the date the last of the deductions was made.

The Court of Appeal also overturned the decision of the EAT in the List case. This means that workers can only claim under the Regulations in respect of one, relevant holiday year and as long as they issue the claim within the 3 months time limit imposed by the Regulations.

TWO WRONGS DON'T MAKE A RIGHT!

Yesterday the Court of Appeal handed down its decision, on remedy, in Beart v HM Prison Service. The Court of Appeal previously held that Mrs Beart had been unfairly dismissed and discriminated against under the Disability Discrimination Act 1995.

The facts of the case are that Mrs Beart was employed by the Prison Service as an administrative officer. Her job was causing her difficulties in collecting her children from school. Mrs Beart enquired about part-time work, but this was misinterpreted as an intention to resign from her full-time position. A part-time position was arranged, but this did not meet with Mrs Beart's requirements and she objected to this and sought to continue in her original post. She was told that her original position had already been advertised. Following this, Mrs Beart went on sickness absence suffering from depression.

A medical report was obtained which recommended redeployment at another prison. Redeployment was not considered. Mrs Beart was subsequently dismissed on grounds that it was suspected that she had been working whilst on paid sick leave.

The Tribunal awarded a six-figure sum that was appealed by the Prison Service on the basis that its act of unfair dismissal was an intervening act, which broke the chain of causation for the purposes of determining the losses for disability discrimination. If the Prison Service's argument had succeeded, damages for disability discrimination would have ceased on dismissal. Upholding the Employment Tribunal and Employment Appeal Tribunal decisions, the Court of Appeal strenuously rejected the Prison Service's argument, stating that they had committed two discrete wrongs, both of which warranted compensation.

EXTENSION OF TIME FOR UNFAIR DISMISSAL CLAIM (MARKS & SPENCER V WILLIAMS-RYAN)

There is a 3 month time limit to bring a claim of unfair dismissal. The time limit runs from the date of dismissal. Unless it was not 'reasonably practicable' for a dismissed employee to bring their claim in that 3 month period, the Tribunal has no jurisdiction to hear the claim.

When Mrs Williams-Ryan was dismissed from Marks & Spencer, she sought advice from the Citizens Advice Bureau. The CAB advised her to follow M&S's internal appeal procedure, and did not tell her she should file a claim at the tribunal.

Marks & Spencer's internal appeal procedure took 3.5 months, due to the employer's delay, and consequently Mrs Williams-Ryan did not present her Tribunal claim until 4 months after the dismissal.

The Court of Appeal held that the issue of negligence on the part of the CAB did not arise. Rather than simply omitting to advise of the 3 month time limit, the CAB advisor did not advise on unfair dismissal at all. As a result, there was nothing to stop the Court from finding that it had not been 'reasonably practicable' for Mrs Williams-Ryan to comply with the time limit. She has therefore been allowed an extension of time.

Employees should be wary of relying on this case, however. The fact that M&S's internal procedure had been so slow was a major factor in the Court's decision. Additionally, no consideration was given to the fact that M&S had advised the employee in her dismissal letter of her right to bring a claim (although the time limit was not mentioned).

"THE CURRENT EMPLOYMENT TRIBUNAL SYSTEM SHOULD BE CONFINED TO ROOM 101"

This year steeles' annual employment debate will look at whether "the Employment Tribunal system should be confined to Room 101". We are very fortunate again that Norman Lamb MP, Liberal Democrat (North Norfolk) has agreed to chair a specially convened panel of experts. The debate is taking place at Broadway House, Tothill Street on Thursday 19 May and will take place from approximately 6pm to 7pm but please join us for drinks and light refreshments from 5.30 pm and again following the debate.

The debate is open to everybody and not only those who have had the experience of an Employment Tribunal claim. We expect this event to be very popular so we recommend you book your free place as soon as possible.

For details on how to book please call Beth Wilson on 0870 60 90 200, email rsvp@steeleslaw.co.uk or book online

This article copyright © 2005 Steeles Law llp. All rights reserved.