ABG Employment Newsletter – August 2010

Equality Act 2010

The Government Equalities Office has issued a list of those provisions of the Equality Act which will be brought into force on 1st October 2010. The GEO has said that the vast majority of the Act’s provisions will come into force on that date including:-

  • The basic framework of protection against direct and indirect discrimination, harassment and victimisation in employment.
  • The new concept of “discrimination arising from disability” which replaces “disability related discrimination” and the watering down of the latter concept as a result of the House of Lords ruling in the Malcolm case.
  • Preventing employers from asking pre-employment health questions except in specified circumstances.
  • Making pay secrecy clauses unenforceable.
  • New powers for Employment Tribunals to make recommendations in relation to the workforce as a whole.
  • The general provisions allowing voluntary positive action.

The GEO has also set out those provisions which it is still considering how to implement. This includes the concept of combined discrimination, gender pay gap information and the provisions relating to positive action in recruitment and promotion.

Sick Leave and Holiday Accural

The latest case on this topical subject is the Employment Tribunal’s decision in Khan -v- Martin McColl.

Mr Khan had been on long term sick leave from May 2008 until August 2009 when he resigned. On his resignation his employers quite properly paid him holiday pay for the holidays which had accrued during 2009 prior to his resignation. His 2009 holidays had continued to accrue even though he was off sick. As he had not been able to take the holidays due to his sickness, he was entitled to payment in lieu on termination.

He then brought a claim to the Employment Tribunal for 4 weeks holiday pay for 2008 and 2 weeks holiday pay for 2007. He had been allowed to carry forward 2 weeks holiday from 2007 to 2008 when his employment had transferred under TUPE in 2007 from his previous employer and the new employer had guaranteed that no transferring employee would lose any holiday entitlement that had not been used before the transfer. Before going off sick in May 2008 he had not taken any of this 6 weeks holiday.

The Employment Tribunal ruled that he was not entitled to any further payment for the 6 weeks untaken holidays. This was for two reasons:-

  • First, he had not requested any holidays whilst he had been off sick and so had not been denied holiday or prevented from taking holiday.
  • Second, his claim for 2007/08 holiday pay was out of time as it had been brought more than 3 months after the end of 2008. The fact that the employer had made a payment on termination for his 2009 holiday pay had broken the series of notional deductions from pay (arising from the non-payment of holiday pay).

There have now been a number of cases which have been decided since the European Court of Justice decisions on sick leave and holiday pay in the Stringer and Pereda cases. The principles which have emerged from these cases appear to be as follows:-

  • Holiday entitlement continues to accrue during sickness absence. If a sick employee is prevented from taking holiday, the employee must be allowed to take the holiday following return to work, even if this means carrying the holiday forward into the next holiday year.
  • If the employee’s employment is terminated before any return to work (either dismissal or resignation), the employee is entitled to be paid for holidays which have accrued during the current holiday year. As to holidays which accrued during previous holiday years:-
    • (a) The employee is not entitled to any payment if, whilst on sick leave, he did not request to take holiday or to receive holiday pay. This is because he was not denied his holiday or prevented from taking holiday due to his sickness and as a general rule untaken holidays cannot be carried forward from one year to the next.
    • (b) The employee will be entitled to payment for holidays accrued during previous holiday years if he requested to take holiday or to receive holiday pay and his claim is brought within 3 months of the payment made to him for his current year’s holiday. Note that, whilst sickness absence is continuing, the employer can choose to pay the employee holiday pay if the employee requests payment. This seems a sensible course because it avoids the possibility of a large amount of holiday pay being claimed at a later date if and when employment comes to an end.
  • If the employee returns to work from sickness absence:-
    • (a) The employee is entitled to take holidays which have accrued in the current holiday year in the usual way.
    • (b) As to holidays accrued during the previous holiday years, the position is the same as on termination of employment. Those holidays will have been carried forward and the employee will be entitled to take the holidays if he had requested to take the holidays whilst off sick but had been denied them or prevented from taking them. However, the holidays will have been lost and not carried forward if there was no request to take the holidays or for holiday pay.
  • An employee who falls sick during a period of pre-booked holiday leave can cancel the holiday leave. The holiday leave becomes sick leave and following return to work the employee remains entitled to the holiday leave which he cancelled. He can thus take it again at a later date.

The comments in this note are of a general nature only. Full advice should be sought on any specific problems.

ABG Employment Newsletter – August 2010

Christopher Gigg 
[email protected] 
+44 (0)115 934 3310

David Hardstaff
[email protected]
+44 (0)115 934 3323

Kathryn Meir
[email protected]
+44 (0)115 934 3308