Employment Law Cases

November 2009

Sickness Absence Instead of Pre-Arranged Holiday

Continuing with the theme of sickness absence, the European case of Pereda v Madrid Movilidadsa has dealt with the vexing question of what happens when an employee falls ill while taking their holiday.  Until now employers have been able to insist that the pre-arranged holiday remained as holiday time even if the time off they were taking was just statutory leave as opposed to any additional contractual leave that the employee may be entitled to.  However, the Pereda decision has cast doubt on that position because the ECJ held, in that case, that the worker must have the option to designate an alternative, future period as annual leave in such a scenario.

In the Pereda case, all annual leave was agreed in advance using annually negotiated rotas so that there were always sufficient workers available to the factory in order to ensure completion of the workloads.  According to these pre-agreed rotas, Mr Pereda was due to take his annual leave from 16 July to 14 August.  However, following an accident on 3 July, he took sick leave and was unfit for work until 13 August.  This meant that all but two of his annual leave days coincided with his period of sickness.  He asked his employer to grant him an alternative period of leave but his request was refused.

Relying on the Stringer decision above, the ECJ has now held that the entitlement to four weeks’ paid annual leave under the Working Time Directive is a “particularly important principle of community social law from which there can be no derogations”.  In the ECJ’s view, the purpose of annual leave is relaxation and leisure.  The ECJ felt that this was different to the purpose of sick leave, which is to allow someone to recover from illness or injury.  On that basis, the ECJ felt that a worker who falls sick during a period of holiday leave should have the right, at their request, to take their holiday leave during a time when they were not ill.

Although the outcome of the Stringer decision was that a worker could take annual leave whilst absent due to illness or injury, the Pereda decision means that, if a worker does not want to do so, then the employer must make provision for the employee to take their holiday leave when they return to work even if that is in a new leave year.  This may be open to some abuse (particularly because employees can self certify their periods of sickness absence for the first seven days) and so employers should check the sickness provisions in their contracts of employment to ensure that they have the ability to request medical evidence to support claims of ill health while during holiday absence.  However, the case has highlighted further deficiencies in the UK’s implementation of the European Working Time Directive and therefore the ultimate decision on the issue of holiday and sickness absence will need to be decided by Parliament.  Watch this space!

Impact of a Third Party Decision

On a more positive note for employers, the EAT has confirmed in the case of Henderson v Connect (South Tyneside) Ltd that, provided a fair procedure is followed, an employer can dismiss an employee whose continued employment becomes untenable due to the position of a third party even if the position of that third party is unreasonable.

Mr Henderson was a mini-bus driver providing services to disabled children in South Tyneside.  Mr Henderson’s employer was Connect, a sub contractor of the local Council.  One of the conditions of the commercial contract between Connect and the Council was that the Council had an absolute veto over the employment of any particular individual working as a driver on the Council contract.

Mr Henderson had initially had a clear CRB check but allegations were made regarding his behaviour towards members of his family.  The police did not prosecute Mr Henderson and he protested his innocence but the Council’s Safeguarding Board reviewed the case and decided that Mr Henderson should not be allowed to work with children.  Connect duly suspended Mr Henderson because he could not continue to work on the Council contract.  During his suspension, Connect tried hard to persuade the Council to reconsider its position.  When the Council refused to do so, Connect explored other options but ultimately decided that it had no choice but to dismiss Mr Henderson because no other work was available for him to do.

The EAT supported the Employment Tribunal’s conclusion that Mr Henderson’s dismissal fell within one of the fair reasons for dismissal, namely “Some Other Substantial Reason”, founded on third party pressure.  In the view of the Employment Tribunal, and the EAT, the employer had done everything they could to support Mr Henderson but, on learning that the Council would not change its mind, their decision to dismiss was within the range of reasonable responses available.  Although the EAT noted its discomfort with this outcome, they also noted that the employer had done everything that could be reasonably expected to address the injustice caused to Mr Henderson and to get the third party to change their mind.  Having done so, the employer had, in the view of the EAT, discharged its obligations to Mr Henderson.

This case may somewhat turn on its facts but it is important to note that, provided the employer has done everything that can be reasonably expected of them, pressure from an outside party will give fair grounds to dismiss provided that a fair procedure is also followed.

Shifting Time Limits

Finally, on a less positive note, the case of Teva (UK) v Heslip is a reminder to all employers that the three month time limit for bringing an Employment Tribunal claim of unfair dismissal is not necessarily absolute.

Ms Heslip was a sales manager for Teva (UK) before she was made redundant on the basis that the Company was no longer going to market products in the area that she covered and thus the Company had a diminishing requirement for sales personnel in her area.  After consultation, she was notified of her redundancy with immediate effect on 2 May 2008.  On 13 August, she learnt from a colleague, that her area was in fact still being covered and that products were still being marketed in that area even though she had been told the exact opposite.  She took legal advice on 19 August and presented her claim of unfair dismissal on 29 August, after the Bank Holiday and after the usual three month time limit for presenting her claim had expired.

The Employment Tribunal concluded that it was not reasonably practicable for Ms Heslip to have presented her claim within the three month time limit as she had only learnt that the redundancy exercise was a sham on 13 August 2009.  The Employment Tribunal also thought that it was reasonable for the Claimant to have taken some time after discovering those facts to seek legal advice and then present the claim.

The EAT restated the well known position that where a later discovery leads to a change in an employee’s belief in the prospects of a successful claim then the time limit should be extended.  In such circumstances, the person bringing the claim needs to establish that their ignorance of the facts was reasonable and that the new information genuinely led them to change their belief as to whether or not a claim could succeed.  However, provided they could satisfy this test and provided the individual had then acted within a reasonable time of learning the new information, the time limit should be extended as it was here.

Although this is not ‘carte blanche’ for employees to bring claims well after the normal three month deadline, it is important for employers to be alive to the fact that the three month deadline can be extended in certain circumstances and that the passing of the three month deadline should not, be seen as a cast iron guarantee that a claim will no longer succeed.

Back to Employment Law E-Bulletin Nov 09
Lead article on holiday pay and sickness

Nov 09