September 2012 Employment Law Newsletter


If you would like to discuss any employment issues please contact Julie Taylor on 01635 508181

1. it’s all about the Status!

The Court of Appeal has determined that a GP who was an integral part of a company and was providing services as a surgeon could be a ‘worker’ for the purposes of a holiday pay and unlawful deductions claim, even though he was in business on his own account.

The statutory definition of ‘worker’ specifically excludes a person who provides services to a ‘client or customer’ of the profession or business the individual carries on. However, this decision highlights that where the individual is a fundamental part of a business and they are providing personal service to a company which is not their client, they are likely to be classified as a worker

This emphasises that employers, who wish to avoid someone who works for them being considered an employee or a worker, should take specific legal advice and generally proceed with caution in this area.

2. Prevention is better than cure!

The Employment Appeal Tribunal has found that where a manager behaves badly towards an employee, but not so as to destroy or seriously damage the relationship and justify the employee resigning, quick and reasonable action by other managers can prevent the situation escalating into circumstances that would justify the employee resigning and claiming constructive dismissal.

This means that if an employee raises a grievance about the bad behaviour, it may be possible to prevent the situation deteriorating into a constructive dismissal situation by upholding the grievance and taking immediate steps to resolve the issues.

This case highlights the importance of handling grievances promptly and fairly in accordance with grievance policies and procedures and is encouraging for employers. Additionally, appropriate action should be identified and taken quickly if a grievance is upheld.

3. ACAS Redundancy handling advice

ACAS has published additional advice on managing redundancy situations, which includes advice for employers on how to break the difficult news to staff about job cuts, an explanation of the need for fairness and objectivity when applying selection criteria and other useful information. A copy of the booklet can be found here.

4. Compensation awards: Death in Service Benefits

The Employment Appeal Tribunal has held that a lost death in service payment can form part of compensation following unfair dismissal. This means that the estate of an employee who is unfairly dismissed and dies shortly afterwards can bring a claim for the loss of the death in service benefit.

The amount recoverable as compensation by the employee’s estate would usually be limited to the cost of the insurance premium. However, in this case it was decided that, as the employee would not have been able to take out a replacement policy after his dismissal because he died soon afterwards and was having serious medical treatment in-between, his estate should be awarded the amount that would have been paid out on his death under the policy.

5. Holiday Leave and Sickness absence

The Court of Appeal has determined that a worker, who has not taken paid annual leave in the relevant year as a result of absence through illness, is entitled to a payment in lieu of that accrued untaken holiday on termination of employment without having made any prior request to carry the leave forward.

This demonstrates that a worker does not lose the right to paid annual leave because they are absent through sickness during the holiday leave year and that sickness has prevented them from taking paid annual leave. In these circumstances, the worker is entitled to take the paid annual leave at another time when they are not sick and, if necessary, in another leave year. If the employment relationship ends before the worker is able to take the accrued leave, they will be entitled to a payment in lieu of any remaining untaken leave.

Employers will need to ensure that workers who have been prevented from taking annual leave by reason of sickness are given the opportunity to take the leave at a later date and if that is not possible because their employment has been terminated, a payment in lieu should be made.

Please note that these comments are intended to summarise some of the employment issues of the moment, not to provide detailed legal advice, so if you need assistance with any employment issues you may have please contact Julie Taylor on: 01635 508181.

Follow Julie on Twitter: @JulieT_GL

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