Disputed reference – Employer wins the day

The recent case of Jackson v Liverpool City Council[1] provides a timely reminder to Leeds’ and Yorkshire based employers that employee references must be true, honest & fair.

Mr Jackson was originally employed as a social worker by Liverpool City Council (‘LCC’). After a while, Mr Jackson applied for an alternative position with Sefton Borough Council (‘SBC’). Prior to Mr Jackson leaving there had been no issues concerning his work and he received a positive written reference from LCC. However, the position had altered by the time that Mr Jackson sought a second reference from LCC in connection with a new SBC position that he wished to apply for; by this time, LCC had discovered various issues relating to Mr Jackson’s record keeping. This time round, LCC refused to answer all of SBC’s questions, stating instead that:

“There were some issues identified by his team manager in respect of recording and record keeping. This was addressed by a supervision and would have led on to a formal improvement plan to assist Mark to make improvements in this area. Mark left the service before this process was instigated.”

Mr Jackson’s application for this second post with SBC was unsuccessful and subsequently he was unemployed for the best part of a year. Mr Jackson sued LCC in the High Court for damages in connection with the second reference.

The High Court found it Mr Jackson’s favour. In doing so the High Court accepted that LCC had provided a true and honest reference, however, the Court went on to say that LCC’s reference to matters which had not been fully investigated was unfair. The Court felt that a better option would have been for LCC to refuse to provide a reference altogether.

LCC appealed the High Court’s decision, arguing that the High Court had failed to correctly apply the existing case law. LCC’s lawyers contended that the test that should be applied in cases such as Mr Jackson’s (i.e. where disciplinary issues had been discovered but not investigated) was whether the reference provided was ‘accurate’ and ‘fair’.

Siding with LCC, the Court of Appeal found that LCC’s reference had been both true and accurate.  Its’ judgment highlighted the fact that LCC had (during a subsequent phone call) been careful to stress to SBC that the allegations against Mr Jackson had not been investigated.

The Court of Appeal’s judgment in this case reminds employers that they owe a duty of care their employers when it comes to the provision of references and that failure to comply with that duty will enable the wronged employee to sue them for damages. The case also provides useful clarification that the facts stated within a reference must be accurate and true.  The question of fairness is also relevant but only in terms of the balance of the reference and any subjective opinions expressed within it.

[1] Jackson v Liverpool City Council [2011] EWCA Civ 1068, 15 June 2011.

Disability discrimination, reasonable adjustments and constructive unfair dismissal

The recent EAT decision in Salford NHS Primary Care Trust v Mrs A F Smith[1] provides useful clarification of what will (and more importantly what will not) constitute a ‘reasonable adjustment’ for the purposes of sections 4A and 18B of the Disability Discrimination Act 1995 (‘DDA’). The decision also examines the requirement for Employment Tribunal’s to assess breach of trust and confidence arguments on an objective basis.

This case concerned a senior therapist (Mrs Smith) who was employment by Salford NHS Primary Care Trust (the ‘Trust’) in a predominately managerial role. Mrs Smith developed a chest infection in March 2007 and was signed off as being medically unfit for work. Unfortunately, Mrs Smith’s health deteriorated following the initial infection with the result that a formal diagnosis of chronic fatigue syndrome (CFS) was made in September 2007. Mrs Smith never returned to work.

The Trust (in response to Mrs Smith’s illness) set about obtaining medical reports concerning the nature of Mrs Smith’s condition and its likely duration. The Trust was also pro-active in terms of trying to explore opportunities for redeployment. It was accepted by the Trust from the outset that Mrs Smith’s condition constituted a disability and that that disability placed the Trust under a duty to consider whether any reasonable adjustments could be made in order to facilitate Mrs Smith’s return to work. It is in context of this obligation that the relationship between the Trust and Mrs Smith began to deteriorate (ultimately leading to Mrs Smith’s decision in June 2008 to resign her employment and pursue claims against the Trust for disability discrimination and constructive unfair dismissal).

Section 4A of the DDA confirms that employers will be placed under a duty to make reasonable adjustments where a provision, criterion or practice (‘PCP’) is applied by or on behalf of an employer which places a disabled employee at a substantial disadvantage in comparison with employees who are not disabled. Section 4A goes on to confirm that the purpose of requiring employers to make reasonable adjustments (wherever it is reasonable for them to do so) is to prevent the relevant PCP from placing a disabled employee at that disadvantage. In the present case the tribunal found that the relevant PCP was the Trust’s requirement that Mrs Smith would perform her full role within her contracted hours.

The position during 2007 and 2008 was that Mrs Smith was medically unfit to perform any kind of productive work and that that position was unlikely to alter for a considerable period of time (stretching into months and possibly even years, not weeks). In view of this the Trust moved on to considering possible redeployment opportunities. However these alternatives proved unworkable from Mrs Smith’s view (either because they would require her to have regular face-to-face contact with members of the public or because they required Mrs Smith to have IT skills). The Trust offered Mrs Smith the opportunity to attend training in order to obtain IT skills but this offer was not taken up. Instead, Mrs Smith pressed for the Trust to take up the advice of one of the medical experts which suggested that the Trust should seek to rehabilitate her through the creation of a non productive therapeutic role and/or that it should consider the alternative of an unpaid career break. The Trust confirmed that it was unwilling to consider either of these options and continued to press for other solutions instead. Various formal meetings were held between the Trust and Mrs Smith during this period of time and the Trust was careful on more than one occasion to make Mrs Smith aware that one possible outcome would be a dismissal on the grounds of her continuing ill health.

As time went on the situation between the Trust and Mrs Smith did not improve and towards the end of her employment Mrs Smith refused to attend meetings with the Trust which had been set up with the intention of considering whether there were any other alternative measures that could be implemented in order to facilitate her return to work. On 18 June 2008 the Trust wrote to Mrs Smith to ask her to attend a further meeting. The Trust’s letter made it clear that if Mrs Smith failed to attend the meeting then a decision to terminate her employment (on the grounds of her ill health) may be taken in her absence. On 23 June 2008, Mrs Smith resigned from her employment (effectively claiming that the Trust’s most recent letter constituted the ‘final straw’ and that she regarded herself as being constructively unfairly dismissed).

At the first instance Mrs Smith’s claims were successful. The Manchester Employment Tribunal found that the Trust’s refusal to introduce a programme of therapeutic non-productive work for the claimant meant that it had failed in its duty to make reasonable adjustments and that consequently Mrs Smith had been discriminated against on the grounds of her disability. Additionally, the Tribunal found that the Trust’s failure to make the desired reasonable adjustments had entitled Mrs Smith to conclude that there had been a breach of the implied term of mutual trust and confidence and consequently that she had been entitled to resign her employment and regard herself as having been constructively unfairly dismissed. The Trust appealed.

The Trust’s appeal contended (inter-alia) that the reasonable adjustment found by the tribunal was not a reasonable adjustment since it “would neither prevent nor alleviate the substantial disadvantage of her [Mrs Smith’s]inability to multi-task, deal with clients or set up emotional boundaries and work in a noisy or busy environment”[2]. Additionally, the Trust also complained that the original Tribunal had been wrong to apply a subjective test (from Mrs Smith’s standpoint) in connection with its finding that the Trust’s failure to make a reasonable adjustment had caused a breach of the implied term of mutual trust and confidence.

Dealing with the reasonable adjustment point first, the EAT took care to return to Section 4A of the DDA in order to clarify that the obligation to make reasonable adjustments is intended to remove the substantial disadvantage that the employer’s PCP places them at. The EAT also referred to Section 18B of the DDA which sets out the test for determining whether or not a proposed adjustment is reasonable and also provides examples of the types of steps that might be taken (depending on the individual circumstances) in order to comply with the duty to make reasonable adjustments.

The decision of the EAT in relation to the aspect of the appeal came down wholly on the Trust’s side. In a succinct and well reasoned decision, the EAT confirmed that “Reasonable adjustments are primarily concerned with enabling the disabled person to remain in or return to work with the employer”[3] and that “Adjustments that do not have the effect of alleviating the disabled person’s substantial disadvantage as we have set it out are not reasonable adjustments within the meaning of the Act. Matters such as consultations and trials, exploratory investigations and the like do not qualify”. In arriving at this conclusion the EAT expressly approved the earlier authorities Tarbuck[4] and Rowan[5]. In the circumstances of the present the EAT had no difficulty in concluding that the proposed adjustments put forward by Mrs Smith and accepted by the original Tribunal did not constitute reasonable adjustments, since neither a career break or programme of therapeutic rehabilitation would have prevented the disadvantage caused to Mrs Smith by the PCP (i.e. the requirement that she would perform her full role during her contracted hours). In short an adjustment which aids an employee’s return to health but does not also serve to mitigate the effects of the relevant PCP will not constitute a reasonable adjustment for the purposes of the DDA.

Separately, the EAT also found in favour of the Trust in terms of its appeal against the original Tribunal’s finding of constructive unfair dismissal. In reaching this decision, the EAT confirmed that the Tribunal’s reasoning had been floored on three separate grounds:

 1. there was no ‘last straw’ – the EAT found that the Trust’s final letter to Mrs Smith had been wholly innocuous[6] and that the reference to the possibility of Mrs Smith’s dismissal was one that was both appropriate and necessary given the  circumstances and that the Trust’s earlier behaviour had not been repudiatory.  The EAT confirmed that the correct test to be applied in ‘last straw’ cased is the test laid  down by Dyson LJ in Omilaju[7] (taking care to quote directly from the following passage);

 “19……The quality that the final straw must have is that it should be an act in a series whose cumulative effect is to amount to a breach of the implied term. I do not  use the phrase ‘an act in a series of acts’ in a precise technical sense. The act does  not have to be of the same character as earlier acts. Its essential quality is that,  when taken in conjunction with the earlier acts on which the employee relies, it amounts to a breach of the implied term of trust and confidence. It must contribute something to that breach, although what it adds may be relatively insignificant.”[8]

2. the tribunal had wrongly applied a subjective test – the decision in Malik[9] and Omilaju make it clear that the correct test to be applied in order to determine whether there has been a breach of the implied term is an objective one and that it will be  necessary to examine whether the employee’s belief that there had been a breach of the implied term is one that is reasonably held; and

3.  the tribunal’s decision was not Meek[10] compliant – on the present facts the EAT concluded that the original Tribunal had failed to give adequate reasons for its decision that the Trust’s refusal to put forward proposals for non-productive work amounted to a repudiatory (i.e. a fundamental) breach of contract.

[1] Salford NHS Primary Care Trust v Smith (Disability Discrimination) UKEAT  0507_10_2608

[2] Salford NHS Primary Care Trust v Smith (Disability Discrimination) UKEAT  0507_10_2608 [27]

[3] Salford NHS Primary Care Trust v Smith (Disability Discrimination) UKEAT  0507_10_2608 [47]

[4] Tarbuck v Sainsbury’s Supermarkets Ltd, UKEAT/0136/06/LA; [2006] IRLR 716

[5] Environment Agency v Rowan UKEAT/0060/07

[6] Salford NHS Primary Care Trust v Smith (Disability Discrimination) UKEAT  0507_10_2608 [66]

[7] London Borough of Waltham Forest v Omilaju (2004/0815 11 2004)

[8] Salford NHS Primary Care Trust v Smith (Disability Discrimination) UKEAT  0507_10_2608 [58]

[9] Malik & another v BCCI [1998] AC21

[10] Meek v City of Birmingham District Council [1987] IRLR 250

Five tips for becoming a better Lawyer

I’m not preaching; these apply just as much to me as anyone else.

1. Use your out of office/voicemail as a last resort. Clients appreciate you answering their calls even if you say you’ll have to call them back later.

2. Avoid self imposed deadlines. How many times have you said “I’ll have that with you tomorrow” and then failed to come up with the goods? Agree a sensible deadline with the client that you are actually capable of meeting.

3. Speak to the person on the other side. Good negotiation skills need to be learned and relying on the email 100% of the time will restrict your growth as a lawyer.

4. Don’t let the client bully you into giving the advice that it wants to hear. If the legal assessment is negative then say so. Your client will appreciate it in the long run.

5. Tackle problems head on. Lawyers often spend more time worrying about issues than it actually takes to solve them.

Social media – should employers be forced to turn a blind eye?

The latest research paper on workplaces and social networking published by ACAS[1] suggests that employers should not make use of social networking in the context of recruitment. That is all very well but is it realistic?

The use of social networking sites by individuals continues to grow at a rapid pace; with recent surveys revealing that there are presently 26 million Facebook users in theUKand that approximately half of all theUK’s internet users now engage in social media dialogue in one form or another.

ACAS’s report rightly highlights the various legal issues that can arise when an employer decides to access an employee’s social networking profiles. In particular, the report seeks to dissuade employers from viewing individual social media profiles when short listing applicants for jobs. The report highlights the potential privacy and equality issues that can arise from employers using social media in this way.

In terms of privacy, the argument is that an employee’s use of social media should effectively be viewed as a private activity and not one that the employer has any right to be interested in. I do not think that a blanket ban on employers accessing this type of information is realistic and doubt the accuracy of the report’s suggestion that an individual’s use of social media can always be characterised as a private activity. There are many different types of social media and I am inclined to think that it will be a futile exercise to expect employers to ignore them completely. Most social media sites allow individual users to limit the extent to which other users can view their content and so is it reasonable for individuals to expect information that is potentially available to millions of internet users to be treated by their existing of future employers as private/confidential; isn’t this approach a little bit naïve and out of sync with the way that people actually use social media? Certainly, in so far as some social media sites are concerned there is a pressing need for individual privacy settings to be made easier for individuals to understand and control. However, ultimately can we really be surprised that employers are increasingly becoming interested in information which employees freely decide to place in the public domain?

For example, I am inclined to think that is legitimate for employers to take account of information gleaned from an individual’s social networking profile to the extent that that information has been made public by the employee and is relevant to the decision of whether or not they should be offered employment. Would anyone really have an issue with an employee who is refused employment because of racist and/or homophobic comments made by them on social media sites? If I was in the business of employing people then I would think that it made absolute sense to use social media in this way (not least because arguably the decision not to offer employment to this type of individual in the first place will assist employers who are intent on creating a harmonious and diverse workforce).

ACAS’s report goes on to suggest that an employer’s use of social media during a recruitment process could lead to discrimination. That much is true and I can see why the larger organisations surveyed in ACAS’s report (ACAS, BT and HMRC) might seek to outlaw the use of social media in this way. However, I think that it is unrealistic isn’t it to expect smaller employers to follow suit. Arguably for these employers social media will provide a potentially useful tool for weeding out potentially unsuitable applicants and many of the individual’s tasked with making recruitment decisions will be regular users of social media themselves. These individuals will appreciate that it is impossible to gain a full picture of an individual from their social media profile alone and that individuals at Board level and below tend to present a more relaxed side of themselves on their social media profiles. No doubt a minority will abuse the information that social media sites provides, discriminating against application on the grounds of their sex, race, politics, age etc but I think that the majority will use the information provided by social media (if indeed they choose to access it at all) responsibly in order to underline positive decisions that have already been made about applicants. In either case, the difficulty for applicants in the event that they object in principle to their social media sites being accessed is that they simply won’t know that it has taken place.

Now, in case reading this piece had led you to conclude that I support employers making unfettered use of social media – I don’t. Of course individuals have a right to expect that employers will not routinely and without good reason monitor their use of social media sites. However, employees also need to act responsibly and in my view there is presently a need for much greater emphasis to be placed on how individuals choose to use social media, the potential implications of that use and the fact that good first impressions count, whether a person in meeting you face-to-face or over the internet. We are at a very early stage in the development of social media. However, it is clear that social media has the potential to make information that we previously regarded as personal freely available. It is right that society is now debating the use of social media and discussions are being had about when it is legitimate for various organisations to seek to access that information and make use of it. However, shouldn’t that debate also focus more closely on educating us as individuals so that we can make informed decisions about our individual use of social media and the information that we choose to share on it?

[1] Andrea Broughton, Tom Higgins, Ben Hicks and Annette Cox (The Institute for Employment Studies) ‘Workplaces and Social Networking – The Implications for Employment Relations’ [2011] Ref: 11/11

ET rules that belief in the existence of a satanic plot to establish New World Order lacked ‘cogency’ and ‘coherence’.

Intriguing and well reasoned judgment from the Sheffield Employment Tribunal (Employment Judge Rostant) concerning a former Principal Intelligence Analyst’s claim that he had been unfairly dismissed and discriminated against on the grounds of his philosophical belief[1].

The facts

Mr Farrell worked for the South Yorkshire Police Authority (SYPA) as a Principal Intelligence Analyst. During his time in this role, Mr Farrell was tasked with producing an annual assessment of the various strategic risks that might threaten SYPA’s operational area. Two of the key risks concerned the potential for internal and external terrorist attacks. Mr Farrell’s final report concluded that the 9/11 and 7/7 attacks had in fact been ‘false flag operations’ carried out with the backing of the US and British governments and that they formed part of a wider strategy by a secret global elite intent on enslaving the masses and establishing a New World Order. Mr Farrell’s employment was terminated by SYPA on 2 September 2010 on the grounds of Some Other Substantial Reason (namely that Mr Farrell’s views were incompatible with the requirements of his role and that they precluded him from effectively discharging his duties).

The question as to whether or not Mr Farrell’s views and/or standpoint was capable of constituting a belief attracting protection under Regulation 2(1) of the Religion and Belief Regulations 2003 (the ‘Regulations’) came before Employment Judge Rostant in a Preliminary Hearing.

Evidently, the hearing was an interesting one. Mr Farrell argued that his beliefs formed part of a relatively obscure but nonetheless genuine strand of Protestant Christian Theology which maintains that the end of the world will be presaged by the rise of a New World Order. Mr Farrell went on to confirm his view that the rise of a New World Order was historically preordained and were a necessary precursor to the ‘end of time’. Mr Farnell then went on to express his view that both the 9/11 and 7/7 attacks and the wars inIraqandAfghanistanwere evidence of the emergence of that New world Order. Importantly, the tribunal drew a distinction at this point between Mr Farrell’s religious beliefs and the subsequent philosophical beliefs (concerning the nature and cause of the 9/11 and 7/7 attacks) that he had developed which were linked to his religious beliefs but were not an inevitable and unavoidable consequence of them.

The decision

It was accepted by all parties that Mr Farrell’s beliefs were genuinely held and that they related to ‘weighty’ and ‘substantial’ aspects of human behaviour. However, the tribunal made it clear that the previously decided authorities in this area (Williamson[2] and Granger[3]) required that a belief should “…..attain a certain level of cogency, seriousness, cohesion and importance” [4] in order to gain protection under the Regulations.

Employment Judge Rostant made in clear in his judgment (which is very well reasoned and worth a good read) that he believed Mr Farrell’s beliefs failed even to meet the ‘bare minimum’ standard of coherence. Explaining his decision, the Judge confirmed that the cogency and coherence of a particular philosophical belief can, in part, be determined by taking account of the broadly accepted knowledge that is already in the public domain concerning events that give rise to a particular philosophical belief. In the present case the tribunal held that the conspiracy theories that Mr Farrell had advanced were, in light of ‘subsequent events’ and the sheer weight of the available evidence ‘wildly improbable’.

Finally, the tribunal made it clear that there was no dispute concerning the fact that Mr Farrell’s claim had been commenced in good faith and that his religious and philosophical beliefs were genuinely held. However, the tribunal went on to confirm that a subjective test (based on whether or not a belief is genuinely held) will be insufficient on its own to afford protection for that belief under Regulations. Instead, the tribunal emphasised the need to objectively assess the cogency and coherence of a particular belief in order to avoid extending protection to beliefs (however widely or narrowly held and regardless of their popularity) that are plainly absurd and appear incapable of rational justification.

[1] Farrell v South Yorkshire Police Authority ET/2803805/10

[2] Williamson -v- The Secretary of State for Education and Employment [2005] 2Ac 246HL

[3] Granger -v- Nicholson [2010] IRLR 4

[4] Farrell v South Yorkshire Police Authority ET/2803805/10 [5.6]

EAT rules that tribunal was too quick to excuse itself following allegation of bias

A robust and clear decision by His Honour Judge Richardson in the recent WestLB[1]appeal provides useful guidance to practitioners on the considerations that need to be taken into account following an allegation of bias which is accompanied by an application for recusal of the Employment Judge on that basis.

Mr Pan issued various claims against WestLB in the Employment Tribunal during 2010 alleging discrimination, harassment, victimisation and ultimately constructive unfair dismissal. The original hearing was listed to take place over 8 days commencing on 10 January 2011. However, for health reasons Mr Pan did not attend the first day of the final hearing where his counsel made a successful application for the remainder of the hearing to be adjourned.

Subsequently and in compliance with a direction issued by the Tribunal, the parties each instructed their own medical experts in order to try and establish the nature and extent of Mr Pan’s illness. The medical experts were also instructed to consider whether Mr Pan was well enough to be able to attend a reconvened hearing. Both experts agreed that Mr Pan was genuinely ill and that he was suffering from a severe depressive order. However, the experts disagreed over the question of whether or not Mr Pan would be able to participate in the final hearing. In the end the Employment Tribunal decided that Mr Pan would be able to attend with appropriate adjustments being made. Accordingly the case was adjourned to 17 January 2011.

Unfortunately however things took a turn for the worse when Mr Pan’s mental state deteriorated further and he was prevented on medical grounds from attending the first day of the reconvened hearing on Monday 17 January 2011. Unsurprisingly the hearing was adjourned for a second time (this time to July 2011).

In April 2011 and somewhat out of the blue, Mr Pan’s solicitors wrote to the tribunal seeking an order that the Employment Judge (Employment Judge Wade) be excused. Mr Pan’s solicitors were critical of the ‘balancing exercise’ that had been carried out by the Employment Judge when the tribunal had earlier been required to decide the medical issue of whether or not Mr Pan was well enough to be able to attend the Tribunal in order to participate in the final hearing. Notably, Mr Pan’s solicitors failed to comply with the requirement under rule 11(4)[2]to inform WestLB’s solicitors of its application and the reasons for it. Unsurprisingly, WestLB’s solicitors (having been sent a copy of Mr Pan’s application by the Tribunal itself) objected to the proposal that Employment Judge Wade should recuse herself from the case. Eventually, after a further letter had been sent to the Tribunal by Mr Pan’s solicitors complaining of bias, Employment Judge Wade decided to step down. In her written decision which outlined the basis for her decision, Employment Judge Wade emphasised that she was not stepping down because the grounds for recusal had been made out (she held that they hadn’t) but rather because she believed that removing the existing panel from the case and substituting it for a new one would help the parties to save costs, focus on the key issues and minimise any prospect of further upset being caused to Mr Pan. Finally, in a letter sent to the parties’ representatives on 5 July 2011 Employment Judge Wade went further and confirmed that arguably her decision could be viewed as the Tribunal making a ‘reasonable adjustment’ to facilitate Mr Pan’s attendance at the final hearing.

The issue before the EAT was whether Employment Judge Wade had acted correctly when agreeing to substitute the original panel for a fresh panel at the resumed hearing (which interestingly and unusually was due to commence the day after the EAT hearing).

The EAT started by examining the Court of Appeal’s guidance in Ansar[3]and concluded that it was clear from Ansar that where an objection of bias is made then the Employment Judge or Tribunal will have a duty to consider it. The EAT had no difficulty in concluding that the Employment Judge had failed to determine the application directly. The EAT confirmed that the Employment Judge:

1. should have given WestLB’s solicitors the opportunity to make representations before deciding to recuse herself;

2. should not have decided the application on her own without her members; and

3. should have given appropriate weight to the important guidance set out in Ansar (which should always be the starting point in determining any application involving an allegation of bias against an Employment Judge or any Tribunal member).

Applying Ansar, the EAT found that Mr Pan’s allegation of bias was completely without foundation and indicated quite strongly to Mr Pan’s solicitors that they would do well to remind him of the thoughtful manner in which the Employment Judge had dealt with the procedural difficulties in the case and also the clear and obvious sympathy that the Tribunal had expressed for Mr Pan in light of his poor health. Reference was also made to Simper[4] as authority for the proposition that ordinarily decisions impacting on all three members of the Tribunal should not be taken by the Employment Judge alone. Importantly, the EAT also cited Simper as  authority for the proposition that applications for recusal will generally not be appropriate in circumstances where the Tribunal is alleged to have demonstrated bias during a case which is continuing. Quoting Peter Gibson J in the Simper case, the EAT confirmed that:

“Save in extraordinary circumstances, it cannot be right for a litigant, unhappy with what he believes to be the indications from the Tribunal as to how the case is progressing, to apply, in the middle of the case, for a re-hearing in front of another Tribunal.  It is, in our view, undesirable that the Tribunal accused of giving the opinion of bias should be asked itself to adjudicate on that matter.  The dissatisfied litigant should ordinarily await the decision and then, if he thinks it appropriate, he should make his dissatisfaction with the conduct of the case by the Tribunal a ground of appeal.”

[1] WestLB AGLondon Branch -v- Mr P Pan UKEAT/0308/11/DM

[2] The Employment Tribunal Rules of Procedure – Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (SI 2004/1861)

[3] Ansar v Lloyds TSB Bank [2006] ICR 1565 (EAT) IRLR 211 (CA)

[4] Peter Simper & Co Ltd v Cooke (No 2) [1986] IRLR 19

NHS on the wrong side of sick pay ruling

The recent Employment Appeal Tribunal (EAT) decision in NHS Leeds v Larner[1] provides useful clarification of the right for employees to receive payment in lieu of their accrued but untaken holiday leave following a period of extended sick leave which culminates in a dismissal.

The facts in this case are relatively straightforward. Mrs Larner commenced working for NHS Leeds in April 2000. On 5 January 2009 Mrs Larner commenced a period of sick leave which culminated in her dismissal by NHS Leeds on 6 April 2010. Mrs Larner was dismissed on the grounds of her incapacity.

The substantive issue before the EAT concerned the NHS Leeds’ decision not to pay Mrs Larner in respect of the annual leave that she had accrued in the most recent pay year (which ran between 1 April 2009 and 31 March 2010). NHS Leeds’ argued by reference to Regulation 15(1) of the Working Time Regulations 1998 that Mrs Larner was not entitled to receive any payment in respect of her accrued but untaken holiday entitlement because she had not given NHS Leeds any notice of her intention to take annual leave. However, Mrs Larner (relying on the earlier authorities of Stringer[2] and Pereda[3]) argued that her incapacity gave rise to a presumption that she had not been well enough to exercise her right to take annual leave and that consequently her entitlement to annual leave had automatically rolled over into the next pay year under Regulation 13.

In a concise judgment the EAT confirmed that Mrs Larner’s analysis of the relevant case law was to be preferred. This meant that Mrs Larner’s inability to take annual leave had caused her statutory leave entitlement to automatically roll over into the next pay year without any requirement for Mrs larner to formally request that it should do so.

The automatic roll over of Mrs Larner’s annual leave entitlement from one pay year to the next, meant that NHS Leeds’ decision to terminate Mrs Larner’s employment created an obligation for it to pay Mrs Lerner in lieu of her accrued but untaken annual leave entitlement for the 2009-2010 pay year.

Interestingly, in this case, the EAT went on to stress (obiter) that the position would likely be different in the case of a fit employee who had failed to request all or part of his/her annual leave entitlement (especially if the contract of employment (as many do) contained an express prohibition on the right to carry annual leave over).

[1] NHS Leeds -v- Larner [2011] UKEAT 0088_11_2907

[2] Stringer v HMRC [2009] IRLR 214

[3] Pereda v Madrid Movilidad SA [2009] IRLR 959


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