Will Court decision lead to an increase in dismissals?

16 06 2009

The House of Lords (HL) has finally handed down judgment in the case of Stringer v HMRC.  To say this decision has been keenly anticipated is an understatement.  I posted on it a little while ago.

The decision confirms that employees are entitled to accrue holiday pay whilst on long-term sick leave.  Some commentators have suggested that employers will want to dismiss those employees to avoid incurring even greater costs caused by the employee’s absence.  This will undoubtedly happen in some cases, but the risk to employers in adopting such a course is risky.  In doing so, they will risk the employee claiming for disability discrimination as well as unfair dismissal.  An employee on long term sick leave may well be able to successfully argue that they are disabled under the DDA.  Both employees and employers also need to bear in mind, of course, that one of the potentially fair reasons for terminating a contract of employment is capability (which includes incapacity to through illness/injury).  Any employer contemplating terminating an employee’s employment because of ill-health needs to proceed very cautiously.

The other main point of this decision is that employees who have previously been denied holiday pay whilst sick can renew their request for unpaid holiday pay for any period within the last six years.  This is because they will be able to argue that the employer has been in breach of contract and in the civil courts it is possible to sue for breach of contract for up to six years after the breach.  Employees will also be able to claim (in the Employment Tribunal) unpaid holiday pay as an unlawful deduction from wages. 

If you need further advice on this subject please contact me.

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