There have been a number of interesting case law and other developments during June. Below is a succinct summary of these developments and what they mean for employers.

Carrying Over Holiday Pay

In King v The Sash Window Workshop, the Advocate General of the CJEU has stated that where a worker does not take their entitlement to paid holiday because their employer refuses to pay them, a worker can successfully claim that he or she was prevented from exercising his or her right to paid holiday. As such, the right to paid holiday carries over until the worker has the opportunity to exercise it. The Advocate General also stated that a worker does not have to take his or her leave first, before establishing whether he or she is entitled to be paid for it – such an approach would be a deterrent to taking leave.

Whilst the opinion is not binding, the CJEU normally follows the opinion of the Advocate General.

Given the above, employers should ensure that employees are able to exercise their right to paid leave. Failure to do so could mean having to pay a significant sum in respect of accrued, untaken holiday on the termination of an employee’s employment.

Shared Parental Leave – Direct Sex Discrimination

An employment tribunal, in a first instance decision, has held that it is direct sex discrimination not to pay full basic pay to a father taking shared parental leave if a mother taking maternity leave during the same period would have received full basic pay. In the case in question, Ali v Capita Customer Management Limited, the claimant as a male employee was entitled to only two weeks’ paid leave following the birth of his child. By comparison, a female employee in the same position as him (but taking maternity leave) would have been entitled to 14 weeks’ paid leave at full basic pay.

Whilst the claimant accepted that there was a material difference in circumstances during the compulsory two-week maternity leave period, his case was that he should be paid the same as a comparable female employee during the following 12 weeks (i.e. at full basic pay rather than statutory pay). He argued that, after the two-week compulsory maternity leave period, either parent could care for the child. It was direct discrimination on grounds of sex, he said, to presume otherwise.

The tribunal agreed that the claimant could compare his treatment with a hypothetical comparator (a female employee who had given birth and was taking leave to care for her child after the two-week compulsory leave period), even though he had not given birth. The claimant was denied the more favourable treatment (full basic pay for the 12-week period) afforded to female employees taking maternity leave. As such, the tribunal found that he was treated less favourably because of his sex.

Interestingly, the tribunal specifically referred to cases of adoption (where either parent can take the role of ‘primary adopter’ and neither has given birth). The tribunal also noted that (i) men are being encouraged to play a greater role in caring for their children and (ii) it is not clear why any exclusivity should apply beyond the two-week compulsory maternity leave period. Mothers, the tribunal said, will not always be best placed to be the primary caregiver. In this case, the mother was suffering with post-natal depression.

The tribunal appeared to take the view that, beyond the compulsory maternity leave period, men and women are in the same position with respect to caring for newborn children. It is worth noting, however, that the Pregnant Workers Directive provides for a minimum maternity leave period of 14 weeks - an absolute right of women who have given birth.

The case is only a first instance decision. It runs contrary to the outcome of another case concerning shared parental pay (where the correct comparator was viewed as being a woman taking shared parental leave, not maternity leave). It is understood that both decisions are being appealed. An appellate decision will therefore bring welcome clarity. Until this time, employers may wish to delay making any changes to their current shared parental leave schemes.

Whilst the policy objectives behind the introduction of shared parental leave would support enhanced shared parental pay, in order to incentivise the uptake of shared parental leave by men, the strict legal position regarding related sex discrimination claims remains unclear. The case of Mr Ali does, however, indicate the tribunal’s willingness to comment on the role of men in bringing up children and the application of shared parental leave in this regard. There will no doubt be further legal, political and social discussion on this topic.

TUPE and Garden Leave

In the case of ICAP Management Services Ltd v Berry, the High Court has established that a senior executive was unable to use an alleged TUPE transfer to object to (and terminate) his period of garden leave.

The claimant gave notice to his employer in order to join a competitor. He was subsequently placed on garden leave. During his garden leave, his employer was the subject of a share acquisition. The claimant said that he considered there to be a TUPE transfer and purported to object to the transfer. His objection would have had the effect of terminating his employment contract and his period of garden leave. The result of this would have enabled him to take up employment with the competitor employer at an earlier time.

ICAP brought legal action to enforce the claimant’s garden leave. They succeeded because they successfully argued that TUPE did not apply in the circumstances as it required a change in identity of the employer.

Generally, a share acquisition will not of itself trigger the application of TUPE and result in a change of employer. On the facts, the High Court was able to distinguish the share acquisition of ICAP from a case involving a new owner taking control of the day-to-day running of the business it had acquired and triggering a TUPE transfer. In ICAP’s case, the new owner had not taken such control and there was no TUPE transfer (and therefore nothing for the claimant to object to). Accordingly, the High Court enforced the claimant’s period of garden leave.

The case is a reminder that, whilst a share acquisition can trigger a TUPE transfer, a share acquisition of itself will not cause TUPE to apply. Departing employees, especially those at a senior level, should therefore be mindful of using TUPE to wriggle out of their employment obligations.