Employment law

Contractual sick pay

Manchester City Council v Thurston (2002) IRLR 319

A tribunal ruled that a term in a contractual sick pay scheme providing that 'an employee whose absence on account of sickness is due or attributable to his or her own misconduct will not be entitled to an allowance under the scheme except at the discretion of the employing authority', did not entitle the employers to withhold sick pay from an employee in respect of an absence which began immediately after he was subjected to a disciplinary sanction.

The Employment Appeal Tribunal (EAT) concluded that the tribunal was entitled to find, on the evidence, that the employee's absence was occasioned by a depressive illness which began some time prior to the disciplinary hearing and was not connected with his misconduct.

Furthermore, the tribunal was entitled to rule that, even if the absence had been caused by the disciplinary sanction, the employers would still not have been entitled to withhold sick pay pursuant to the contract.

The expression 'his own misconduct' should not be extended to include the consequences of that misconduct.

According to the EAT, the tribunal was also entitled to find that in any event, the employers should have exercised their discretion to make payments in favour of the employee, having regard to the nature of the incident for which he was disciplined and the fact that he was clearly suffering from depression.

The employee's complaint that his employers had made unlawful deductions from his wages was therefore upheld.

Holiday pay

Kigass Aero Components Ltd v Brown (2002) IRLR 312

The EAT has decided that a worker on long-term sickness absence can claim holiday pay under the Working Time Regulations 1998 in respect of a period of employment throughout which he was absent from work.

The entitlement to annual leave arises if the claimant is or has been a 'worker' during the whole or part of a leave year.

Nothing more is required - and, in particular, there is no requirement for any work to have been done.

However, if a worker wishes to exercise his accrued or accruing right to annual leave then, in accordance with regulation 15, he has to give his employer notice specifying the days on which leave is to be taken and has to give that notice in good time before leave is to begin.

The right to payment arises from the combination of the right to leave having accrued and of its then being duly sought to be taken.

However, the president of the EAT acknowledged that this conclusion 'does have possibly unintended social and employment consequences.

Employers may be driven to terminating employment, rather than letting it continue where there is a long-term sickness absence.

To avoid the risk of that happening, employees on long-term sickness leave may report back to work earlier than is medically desirable.'

Leisure Leagues UK Ltd v Maconnachie, (2002) The Times, 3 May

A tribunal found that accrued holiday pay owing to a worker was calculable on a daily pay rate extrapolated from a total of 233 working days per year, rather than from a 365-day year.

The EAT acknowledged that, in Thames Water Utilities v Reynolds (1996) IRLR 186, section 2 of the Apportionment Act 1870 was held to apply, so that all periodical payments in the nature of income should be considered as accruing from day to day and should be apportionable in respect of time accordingly.

The High Court had thus concluded that 'day to day' meant calendar and not working days.

However, the EAT considered that this approach was at odds with present day industrial practice.

Thames Water Utilities predated the Working Time Regulations 1998, several provisions of which supported an alternative approach.

Therefore, accrued holiday pay ought to be calculated by reference to the number of working days and not the number of days per year.

The EAT pointed out that the alternative approach might result in holiday pay accruing at a yearly rate falling below the statutory national minimum wage.

Compromise agreements

The government has decided to remove a provision in the Employment Bill currently passing through Parliament which dealt with compromise agreements.

The clause was intended to remove the statutory requirement that compromise agreements must relate to a 'particular complaint'.

The intention was to clarify the law and allow employees to compromise a wide range of potential claims.

However, fears have been expressed that the proposed change might enable unscrupulous employers to require employees to contract out of their statutory rights in inappropriate circumstance.

The government has bowed to pressure and abandoned the proposed reform.

This is unfortunate.

Arguably, the best way to achieve the twin objectives of avoiding abuse and eliminating uncertainty would be for there to be more emphasis on conciliation of employment complaints by the Advisory, Conciliation and Arbitration Service rather than by means of compromise agreements.

Whistleblowing

Miklaszewicz v Stolt Offshore Ltd (2002) IRLR 344

The Court of Session confirmed that a tribunal had jurisdiction to consider an alleged whistleblower's complaint of unfair dismissal which he claimed was prompted by his making a 'protected disclosure' even though the disclosure took place six years prior to the legislation on which he relied coming into force.

It is the dismissal which triggers an employee's entitlement to invoke the statutory remedies and thus it is immaterial whether the disclosure was made before or after the legislation was introduced.

By Martin Edwards, Mace & Jones, Liverpool