Case law update
Annual leave carry over
Can a worker who has not taken paid annual leave during the holiday year due to being on sick leave claim a payment in lieu of accrued but unused holiday entitlement on the termination of their employment, even if they have not made a previous request to carry that holiday forward to the next holiday year?
Yes, says the Court of Appeal in NHS Leeds v Larner.
Mrs Larner was on long term sick leave for the whole of the holiday year during 2009/10. During that time she didn’t take any paid annual leave or ask to carry the leave forward to the following holiday year (2010/11). She was then dismissed. NHS Leeds refused to pay her in lieu of accrued but unused annual leave for the holiday year 2009/10 on the termination of employment. Mrs Larner brought a holiday pay claim against NHS Leeds in the Employment Tribunal. The case was ultimately appealed to the Court of Appeal.
The Court of Appeal held that, as Mrs Larner’s employment was terminated before she could take the outstanding annual leave, she was entitled to payment in lieu on termination of employment for the paid annual leave she had been prevented from taking. This was irrespective of the fact she had not asked to carry the leave forward.
This follows several other cases over the past few years on holidays and sickness absence. These cases have held that holiday pay continues to accrue during periods of sickness absence (Stringer v Revenue & Customs) and an employee who is prevented from taking annual leave through sickness must be allowed to take the annual leave they have missed later in the year, or if that is not possible, in a subsequent leave year (Pereda v Madrid Movilidad).
Two important redundancy cases
There have been two recent cases which will be of interest to any employer embarking on a redundancy process.
Nicholls v Rockwell Automation Ltd
The Employment Appeal Tribunal considered on appeal by Rockwell Automation whether the Employment Tribunal had been correct in closely examining the scoring in a redundancy selection process to establish whether the dismissal of Mr Nicholls was unfair.
The general rule when deciding redundancy selection criteria is that they should be as objective as possible.
In this case the Employment Tribunal had held that Mr Nicholls’ dismissal was unfair because several of the redundancy selection criteria were not capable of objective assessment and Mr Nicholls’s marks in these categories were lower than they should have been.
However, the EAT held “It is not the law that every aspect of a marking scheme has to be objectively verifiable (by which we mean verifiable independently of the judgment of management) as fair and accurate. If overall the redundancy criteria were reasonable then the fact that some items were not capable of objective verification is not fatal to the scheme.” The EAT therefore allowed the appeal.
This is good news for employers, although the safest way for employers to handle redundancy processes is still to have as objective selection criteria as possible or, if there is an element of subjectivity to allow this to be measured objectively.
Packman (t/a Packman Lucas Associates) v Fauchon
If an employer wants to reduce the number of hours per week that an employee works but still requires them to perform the role, is the employee entitled to a redundancy payment if they refuse the reduction in hours?
Until now the law on this point has been unclear with two conflicting decisions – Aylward v Glamorgan Holiday Home Ltd (where the EAT held that a reduction in headcount is required and that, accordingly, where employees were dismissed for refusing to work reduced hours there was no redundancy) and Hanson v Wood (which held that a dismissal following a refusal to accept a requirement to reduce working hours did constitute a redundancy).
In the Packman case, the EAT followed the decision in Hanson and held that Mrs Fauchon had been dismissed on the grounds of redundancy and was entitled to a redundancy payment.
Employers should bear this decision in mind when seeking to reduce hours of work as it may (subject to any contrary wording in an employment contract regarding working hours) give rise to a redundancy situation and, possibly, a redundancy payment being payable.
To discuss any issues surrounding these cases, or you need help with any employment law issues get in touch at contact@integralegal.co.uk