Carrying over holiday when sick

UK full-time workers are entitled to 28 days annual leave a year. This is made up of the right to a minimum of 20 days leave under European law and an additional 8 days under UK law. The legal position had already been clear in that workers who have been unable to take the holiday due to sickness were permitted to carry over the 20 days annual leave into the next leave year. In Sood Enterprises Ltd v Healy the issue before the Employment Appeal Tribunal was whether the additional 8 days could be carried over in respect of workers who have been prevented from taking holiday due to illness. It was held that such employees have no entitlement to the carry-over of the additional 8 days.

What this means is unless there is a contractual provision to the contrary, employers are not required to allow staff, who have been prohibited from taking annual leave due to long term sickness, to carry forward more than 20 days of their holiday entitlement. Furthermore, if a employment contract is terminated, employers are permitted to limit any payment due in lieu of holiday to 20 days.

Overtime = more holiday pay?

In Neal v Freightliner Limited the Employment Tribunal held that employers must take voluntary overtime into account when working out employees’ statutory holiday pay. It must be noted that an Employment Tribunal decision is not legally binding so this point will need to be clarified by the Employment Appeal Tribunal or a higher court.

The impact of this decision is that employers paying staff who volunteer for overtime should consider taking their overtime pay into consideration when calculating holiday pay. Solutions for employers who may be adversely affected by a legally binding ruling include, restricting overtime or allowing staff to have time off in lieu instead of overtime pay.

Looking after the intern

New guidance from the Health and Safety Executive (HSE) has been published for employers who take on work experience students.

In general the HSE advises employers to treat risk management of work experience students equally to others they employ. The guidance tells employers that existing Employers’ Liability Insurance policies should cover work placements provided that the insurer has membership of the Association of British Insurers. The HSE states that companies with fewer than 5 employees are not required to have a written risk assessment and repeat assessments are not needed for every new work experience student.

Meaning of equal pay extended

In North and Others v Dumfries and Galloway Council the Supreme Court ruled that staff employed at different establishments were in the same employment for equal pay purposes. Under the Equal Pay Act 1970 if two groups are on ‘common terms’ they are ‘in the same employment’. This case concerned two groups employed by the same local authority but at different establishments. The male workers were paid bonuses but the female workers were not. Employers are urged to seek legal advice whenever an employee brings a complaint concerning equal pay.

Employee owned companies

Employee ownership is where all employees have a significant and meaningful stake in a business. Model documents and guides for employee owned companies have been issued by the Department for Business, Innovations and Skills. The model documents include sample articles of association for companies with employee ownership and a trust deed for an employee benefit trust. The guides explain how the documents should be used and give an overview of employee ownership for those involved. In addition HM Revenue & Customs has a publication on tax issues for an employee share benefit trust. It is essential that employers planning on offering a stake in their business to their employees should obtain legal advice.

From compromising to settling

Legislation, which re-names compromise agreements as settlement agreements came into force on 29 July 2013. The legislation also prohibits any pre-termination negotiations from being used in evidence in any unfair dismissal claim even if there is no present employment dispute. The effect of this is that parties involved in unfair dismissal cases will usually be unable to disclose to a Tribunal any offer made or discussion of proposed settlement terms before a person’s employment is terminated unless there has been ‘improper behaviour’. When a Tribunal is asked to makes a costs award parties will be able to talk about the offers or discussions. If the discussions follow a pre-existing dispute, they cannot be referred to in claims of discrimination, unfair dismissal or breach of contract unless there is ‘unambiguous impropriety’ (for example; wrongdoing is concealed).

There is a new ACAS Code of Practice on settlement agreements too. Employers wishing to discuss paying a settlement to employees should consult this Code and obtain legal advice.

Claiming against employer and former colleague

The Employment Appeal Tribunal ruled in Hurst v Kelly that an employee was not barred from pursuing a discrimination claim against a former colleague when her employer was not a party in the proceedings. Where an employee and employer enter into a settlement agreement which prohibits the employee from bringing any claim against the former employer arising out of their employment and its termination, the employee might still be able to bring an action against a former colleague.