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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> McKeever v St Matthew's Housing Associati... [2009] NIIT 1419_08IT (09 October 2009)
URL: http://www.bailii.org/nie/cases/NIIT/2009/1419_08IT.html
Cite as: [2009] NIIT 1419_8IT, [2009] NIIT 1419_08IT
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THE INDUSTRIAL TRIBUNALS
CASE REF: 01419/08
CLAIMANT: Michael Gerard McKeever
RESPONDENT: St Matthew’s Housing Association
DECISION
The unanimous decision of the tribunal is that the claimant’s claim to be compensated by the respondent for loss of incapacity benefit is dismissed. His claim for payment of untaken holiday leave is allowed and the respondent is ordered to pay to the claimant £5,600.77.
Constitution of Tribunal:
Chairman: Mr B Greene
Members: Mr Hampton
Mr McAnoy
Appearances:
The claimant appeared in person.
The respondent was represented by Mr Glinwood, HR Consultant of Insight.
SOURCES OF EVIDENCE
1. The tribunal heard evidence from the claimant and for the respondent from Patrick Devlin, Denis Blakely and William Patrick Ward. The tribunal also received two bundles of documents amounting to 301 pages and two written submissions from the claimant.
THE CLAIM AND DEFENCE
2. The claimant claimed unfair dismissal, unauthorised deduction of wages, non-payment of holiday pay and compensation for loss of incapacity benefit. The respondent resists the claimant’s claims in their entirety. It also claimed that the claim for non-payment of holiday pay and compensation for loss of incapacity benefit are time barred.
On the first day of the hearing the claimant abandoned his claim for unfair dismissal without objection.
The claimant has also received his full notice pay.
ISSUES
3.
(i) Is the claimant entitled to payment for untaken holiday leave?
(ii) Did the claimant suffer an unlawful deduction from wages?
(iii) Is the claimant entitled to compensation for non-receipt of incapacity benefit?
(iv) Is the claimant’s claim for loss of incapacity benefit out of time?
(v) Did the claimant bring his claim for payment for untaken holiday leave within the statutory time limit
(vi) If not, was it brought within such further reasonable time where the tribunal was satisfied that it was not reasonably practicable to bring it within the prescribed period?
4. Owning to the pending decision of the House of Lords in HM Revenue & Custom v Stringer and Ors the tribunal deferred its decision until the House of Lords had delivered its decision and the parties had an opportunity to consider it and to make submissions on the decision. The claimant made a further submission but the respondent did not.
FINDINGS OF FACT
5. (i) The respondent is a registered Housing Association with charitable status. It is a body dedicated to the provision of housing and is governed by statue in its functions and operations.
(ii) The respondent employed the claimant from 10 January 2000 until 11 July 2008 as Director of the Housing Association.
(iii) The claimant earned per month £2,549.83 gross. His net monthly salary is not known to the tribunal.
(iv) The claimant was off work from 7 November 2006 until 11 July 2008 on long-term sickness with a serious health complaint.
(v) The respondent dismissed the claimant on 11 July 2008 on the ground of incapacity.
(vi) The respondent’s leave year runs from 1 April to 31 March.
(vii) In the leave year 2006/2007 the claimant did not use 21 days of his leave entitlement and in the leave year 2007/2008 he did not use 27.1 days of his leave entitlement
Up to five days untaken leave may be carried forward with the permission of the respondent.
(viii) On 10 May 2007 the claimant sought permission from the respondent to carry over his then unused leave entitlement by reason of his expected hospitalisation and inability to use the leave before that hospitalisation because of the needs of the respondent Housing Association.
(ix) On 10 October 2007 the respondent advised the claimant that under the NJC Green Book he could only carry forward five days, which was permitted.
(x) The claimant received his final contractual sick pay entitlement on 6 November 2007.
(xi) The claimant proposed signing off the sick from 7 November 2007 and using thereafter his untaken holiday leave entitlement, in the expectation that he would be returning to work in January 2008. The respondent refused this request as it was of the view that annual leave could not be taken when someone was off by reason of being sick.
(xii) Two Board Members, Mr Devlin, Chairman, and Mr Ward, Treasurer of the respondent association, met with the claimant on 19 December 2007 and advised him that they might be able to pay him for his 21 days holiday leave for 2006-2007 in addition to his leave for 2007-2008.
(xiii) Despite correspondence and contact between the claimant and the respondent no answer was forthcoming as to whether the claimant would receive payment for his untaken holiday leave. On 10 April 2008 the claimant lodged a grievance about this and other matters.
(xiv) A grievance meeting was held to discuss the holiday leave issue on 3 June 2008 with Mr Devlin.
(xv) By letter of 11 June 2008 the respondent notified the claimant of his dismissal, effective from 11 July 2008 on the ground of incapacity.
(xvi) Mr Devlin advised the claimant on 13 June 2008 that he would not be paid for any untaken holiday leave. He cited as a reason for that decision a decision of the European Court of Justice. He further advised him that he would not be allowed to carry forward untaken holiday leave. At this meeting the claimant was also informed that he would not be paid for the loss of incapacity benefit.
(xvii) On 20 June 2008 the claimant appealed the respondent’s decision. He contended he was entitled to be paid for untaken holiday leave for 2006-2007 (21 days) and 2007-2008 (27.1 days) which amounted in monetary terms to £5,600.77. The respondent accepts the calculation of days and that their monetary value is correct but disputes its liability to pay the claimant for untaken holiday leave.
(xviii) The Chairman of the Board of the Association, Mr Devlin, offered by way of a compromise settlement £4,000 for all claims by the claimant in a letter of 30 June 2008. The claimant did not accept this offer.
(xix) The grievance appeal hearing was held on 30 July 2008. By letter of 7 August 2008 the claimant was informed his appeal was unsuccessful and it was denied that there had been a promise to pay him for untaken leave. The claimant presented his claim on 2 October 2008.
(xx) Subsequent to the expiry of his entitlement to sick pay on 6 November 2007 the claimant made a claim for incapacity benefit. He was advised that incapacity benefit is payable when an employee has been off work for 28 weeks, i.e. from 22 May 2007.
(xxi) The responsibility lies with an employer to issue the employee with an SSP1 form after 28 weeks of sick leave to enable the employee to claim incapacity benefit from the state.
(xxii) The claimant made a claim for incapacity benefit on 26 November 2007. He could not apply earlier as the respondent had not provided an SSP1. Because of the respondent’s failure to provide him with an SSP1 he lost 13 weeks and one day’s benefit from 22 May 2007 to 25 August 2007 as the SSP regulations only permit backdating of the claim for three months. The Social Security Agency refused to pay the 13 weeks and one day claimed because the application was late.
By reason of the respondent’s failure to provide an SSP1 the claimant alleges that he did not receive £955.24 which he would otherwise have received. He now claims that money from the respondent.
(xxiii) The claimant sought to obtain the £955.24 from the respondent at the meeting with Mr Devlin and Mr Ward on 19 December 2007 and by phone and in correspondence including the grievance thereafter. The respondent has not paid this money to the claimant. Further it disputes its liability to make such a payment, though it does not dispute the quantum if the incapacity benefit lost.
(xxiv) The claimant had a meeting with Mr Devlin and Louise Barron, from Insight HR Consultancy, on 9 June 2008 to discuss the claimant’s absence due to ill health.
(xxv) The claimant received his P45 on 9 July 2008 and payment for untaken holidays for the current leave year i.e. 2008-2009.
(xxvi) The claimant met with Mr Ward (Treasurer) and Mr Davey (Committee Member) on 30 July 2008 and contended that he had been unfairly dismissed and had not been given the required notice of eight weeks or payment in lieu.
(xxvii) By letter of 1 August 2008 the respondent paid the claimant his notice pay and pay in lieu of notice that was outstanding.
(xxviii) The claimant is claiming for 21 days untaken holiday leave valued at £2,411.64 for the leave year 2006-2007 and for 27.1 days untaken leave valued at £3,189.13 for the leave year 2007-2008. The respondent does not dispute these calculations.
The claimant is also claiming the £955.24 as compensation for not receiving incapacity benefit by reason of the respondent’s failure to issue an SSP1, the quantum of which the respondent does not dispute.
THE LAW
6. (i) An employer shall not make an unauthorised deduction from wages unless the deduction is required or authorised by statue or the employer’s contract or the worker has previously signified his consent in writing to the making of the deduction (Article 45 The Employment Rights (Northern Ireland) Order 1996).
(ii) Wages means any sum payable to a worker in connection with his employment, including holiday pay and statutory sick pay, under Part XI of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
(iii) An industrial tribunal shall not consider a complaint for unlawful deduction for wages unless it is presented within three months from the date when the deduction was made (Article 55(2)(a) The Employment Rights Order (Northern Ireland) 1996).
(iv) Where a complaint is brought in respect of a series of deductions the three months runs from the last deduction (Article 55(3)(a) The Employment Rights Order (Northern Ireland) 1996).
(v) Where an industrial tribunal is satisfied that it was not reasonably practicable for the complaint to be presented before the end of the three months the tribunal may consider the complaint if it was presented within such further reasonable period (Article 55(4) The Employment Rights Order (Northern Ireland) 1996).
(vi) Entitlement to statutory sick pay ends after 28 weeks (Section 151 Social Security Contributions and Benefits (Northern Ireland) Act 1992).
(vii) After 28 weeks of statutory sick pay an employer must give to the employee a SSP1 form to enable the employee to claim incapacity benefit (Regulation 15 Statutory Sick Pay (General) Regulations (Northern Ireland) 1982).
(viii) Leave to which a worker is entitled may be replaced by a payment in lieu where the worker’s employment is terminated (Regulation 13A The Working Time Regulations (Northern Ireland) 1998 as amended).
(ix) Leave to which a worker is entitled may only be taken in the leave year in respect of which it is due and may only be replaced by a payment in lieu when the worker’s employment is terminated (Regulation 13(9) Working Time Regulations (Northern Ireland) 1998).
(x) An industrial tribunal shall not consider a complaint unless it is presented within three months from the date on which the exercise of the right should have been permitted or payment made or within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of the three months (Regulation 30(2)(a) Working Time Regulations (Northern Ireland) 1998).
(xi) The issue of what happens to annual leave when an employee is on sick leave came before the European Court of Justice on a referral by the House of Lords in Stringer & Others v HM Revenue and Customs and Schultz-Hoff v Deutsche Rentenversicherung Bund [2009] IRLR 214 ECJ. The decision was delivered on 20 January 2009.
Harvey on Industrial Relations and Employment Law at A [N916.01] summaries the outcome as follows;-
“The principle conclusions reached by the court are that:
- The right to annual leave continues to accrue during sick leave.
- The Directive does not prohibit national legislation providing that annual leave cannot be taken during sick leave, but nor does it require that national legislation should permit this.
- Any leave that a worker was unable to take because of being on sick leave can be taken on his or her return to work, not withstanding that this may be in a later leave year.
- Leave entitlement may not be replaced by a payment in lieu unless the employment is terminated before the worker has the opportunity to take his or her leave.
- If payment in lieu is payable it is to be paid at the rate at which the leave would have been remunerated if taken as leave.”
(xii) The issue of annual leave came back before the House of Lords in HM Revenue & Customs v Stringer [2009] IRLR 677. The House of Lords delivered its decision on 10 June 2009. It concluded that failure to pay holiday pay under the Working Time Regulations can constitute an unauthorised deduction from wages under the 1996 Employment Rights (Northern Ireland) Order Article 45 as holiday pay falls under the definition of wages.
It also found that the principle of equivalence in EC law requires that a limitation period in respect of an action on a claim arising out of EC law must not be less favourable than for similar actions based on domestic law. Further it found that payments under the Working Time Regulations and The Employment Rights Order in relation to wages are similar.
(xiii) An employee may bring a claim for the recovery of damages for any sum which is due or is outstanding on the termination of the employee’s employment (Article 3 Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994).
(xiv) The normal time for presenting a complaint is extended for a period of three months beginning with the day after the day in which it would otherwise have expired where the statutory grievance procedure is applicable, the claim has been presented outside the normal time limit and the grievance has been presented within the normal time limit (Regulation 15(1) and (3) The Employment (Northern Ireland) Order 2003 (Dispute Resolution) Regulations (Northern Ireland) 2004.
APPLICATION OF THE LAW AND THE FINDINGS OF FACT TO THE ISSUES
7. Incapacity Benefit
(i) Incapacity benefit is paid by the state to an employee who has been sick for a period in excess of 28 weeks. The responsibility lies with the employer to provide a SSP1 form to an employee so that after 28 weeks a claim can be made by the employee to the state.
The respondent failed to do this. When the claimant became aware of this and made a claim he was outside the prescribed time for making a claim for the whole of his period of incapacity and lost benefit for 13 weeks and one day which is valued at £955.24. This loss is due entirely to the respondent’s failure to provide the claimant with the SSP1 form.
(ii) Incapacity benefit does not fall within the definition of wages in Article 59(1) The Employment Rights Order (Northern Ireland) 1996 even though statutory sick pay does fall within that definition. Incapacity benefit is therefore not recoverable as an unlawful deduction of wages.
(iii) Nor can the claimant recover the lost incapacity benefit under the tribunal’s breach of contract jurisdiction as it is not a sum due or arising on termination of the claimant’s employment from the respondent (Article 3 Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994).
(iv) Accordingly, the tribunal dismisses this element of the claimant’s claim.
Holiday Pay
(v) The claimant did not receive 21 day’s leave for the year 2006-07 and 27.1 day’s leave for the year 2007-08. Payment for that untaken leave is valued at £5,600.77. The respondent does not dispute that the claimant did not receive that leave nor the value of it in monetary terms.
(vi) The claimant is entitled to receive payment for untaken holiday leave in the amount of £5,600.77. His entitlement to receive payment for untaken holiday leave may be arrived at by a number of routes;-
(a) Following the decision of the European Court of Justice in Stringer v HM Revenue & Customs holiday leave accrues during sick leave. The European Directive does not preclude it from being taken while the employee is sick but that is a matter for the national legislature.
In the instant case the claimant was refused permission to take his leave while he was sick. The alternative course set out by the European Court of Justice is to add it to the end of the period of sickness or translate it to a payment where termination follows sickness as in the present case.
The payment for untaken holiday leave will therefore fall due on 11 July 2008 the day of his dismissal. His claim lodged on 2 October 2008 is therefore in time.
(b) As the House of Lords in HM Revenue & Customs v Stringer has found a claim for holiday pay can fall under the provisions for claiming unlawful deductions, time runs from the last in the series of deductions. The date for the last deduction is on the date of the claimant’s dismissal 11 July 2008 and therefore the claimant’s claim is in time.
(c) If time is deemed to begin to run from 13 June 2008 when the claimant was told he was not getting pay in lieu of untaken holiday leave he benefits from the extension of three months by virtue of Regulation 15 of The Employment (Northern Ireland) Order 2003 (Dispute Resolution) Regulations (Northern Ireland) 2004. He appealed the decision on 20 June and presented his claim outside the normal period of three months. Time is therefore extended to six months and therefore his claim is in time.
(vii) The claimant is entitled to be paid for his untaken holiday leave and the tribunal orders the respondent to pay him £5,600.77 for the total of the untaken holiday leave.
(viii) This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.
Chairman:
Date and place of hearing: 17, 28 and 29 April 2009, Belfast.
Date decision recorded in register and issued to parties: