September 4, 2012

Employment Newsletter Highlights Autumn 2012

Sick of Holidays

 As usual just as the holiday period comes to an end there are further cases about taking holiday and sick pay. If you remember this time last year I wrote about the case of Mrs Larson who was unfortunate enough to be off ill and couldn’t take her holiday in her employer’s holiday year. The outcome was that she could carry over the untaken holiday to the next year. In the last year there have been several more cases and the law has moved on further.


So to summarise;

  • Holiday continues to accrue while an employee is off sick.
  • An employee can take holiday (i.e. get paid leave) while on sick leave (attractive if their sick pay has ended).
  • An employer can’t force an employee to take holiday while they are off sick.
  • An employee can carry over statutory holiday entitlements they were not able to take to the next holiday year
  • An employee doesn’t need to request holiday in order to carry it over
  • An employee may be able to take the rolled over holiday for up to 15 months after they return

This faces employers with a number of problems. For example if an employee goes on holiday and becomes sick how can you be sure it is genuine? If an employer doesn’t have paid sick leave over and above SSP this may be less likely to happen. If not in place already, policies can also be introduced to require employees to call in each day of sickness absence. If it is a particular problem you could even consider requiring “fit notes”. However just because an employee isn’t fit to work it doesn’t mean they aren’t fit to go on holiday. Again what work an employee does may make a significant difference to this. However the opposite is true so if the employee is fit to work in say an office job but not fit to go on a skiing holiday they can’t convert “holiday time” into “sick leave”.

Again if an employee induces their own state of ill health, e.g. overindulging while on holiday then an employer may be able to say that the employee breached his duty to his employer by putting himself in a position where he isn’t fit to work and so can’t put his feet up and collect a holiday later.

All this may lead to more changes in the Working Time Regulations to include specific terms about employees carrying over their EU based statutory (4 week) holiday entitlement to the next holiday year if they are unable to take it due to sickness.  However we don’t know yet just how long they will give employees to use it up.

Just as these points become a little clearer another area becomes muddied.  Up to now for employees who don’t earn the same amount each week when holiday pay has been based on an average of their last 12 weeks pay. This didn’t include bonuses and payments directly related to actually doing the work. For instance pilots are paid extras when they actually fly and claimed this should be included in their holiday pay calculation. The European Court of Justice has agreed employees should get their normal pay when on holiday. The Supreme Court in the UK must now decide what elements of a pilots pay are his normal pay. This could have consequences for employees who have been required to do overtime as up to now this hasn’t been included in holiday pay calculations. Again discretionary bonuses paid based on performance might now have to come into holiday pay calculations.


The latest long heralded changes to employer paid pensions start to be rolled out form 1 October 2012. At first this will only apply to employers with over 120,000 (based on 1 April 2012 numbers) and as far as I know this doesn’t apply to any of my readers. However by May 2014 it covers those with between 90 and 149 employees and by April 2017 all employers will be covered by the scheme. Therefore there isn’t that much time to prepare.

This “auto-enrolment” process relates to certain employees and means the employer must put them into a qualifying scheme and make contributions to the employees’ pensions. Therefore employers must register with the Pensions Regulator and be able to provide employees with certain information about how it will affect the employees. Though employees can opt out of the scheme once they have been enrolled the employer must automatically re-enrol them every three years. 

Tribunal Statistics 2011

After a 56% rise in tribunal claims in the year to April 2010 it is not surprising that there was a slight drop back last year. But this still means that there are a lot more claims than in 2008 and previous years. Also the number of some types of case have continued to raise particularly multiple claims (e.g. unfair dismissal combined with discrimination), age discrimination cases and part time worker discrimination claims.

Interestingly in age discrimination the median for awards is currently far higher than for other types of discrimination; over £12,000 compared to £5,000 to £6,000.

National Minimum Wage Rates Increase.

New rates for the National Minimum Wage, came into force on 1st October 2012:

  • £6.08 per hour for adult workers increasing from £5.93;
  • £4.98 per hour for 18-20 year olds increasing from £4.90; and
  • £3.68 per hour for 16-17 year olds increasing from £3.64.

Did you find the articles interesting? Or if there something else you would like to know about give us a call or e-mail me.

Take care

Edit 37. This newsletter looks at new cases and employment related matters, which are likely to be of interest to many. However specialist advice should be obtained before taking or refraining from taking action based on comments in this newsletter, which is only intended as a brief note. For more information or if you have specific concerns phone me on 01233 714055 or e-mail