[2007] EWCA Civ 626, Court of Appeal on 27th June 2007, reported at [2008] ICR 46, CA

NOTES

  • Commissioners for HM Revenue and Customs v Thorn Baker Ltd & Ors, [2007] EWCA Civ 626 on 27th June 2007, reported at [2008] ICR 46, CA
  • The full text judgment in this case is available free of charge on the BAILII website

    Representation:

  • Ingrid Simler QC instructed by the Commissioners for Her Majesty's Revenue & Customs for HM Revenue and Customs (appellant)
  • Gerard Clarke instructed by Sharpe Pritchard for the Thorn Baker Ltd (the respondent).

    Thorn Baker is an employment agency. It refused to pay statutory sick pay to two individuals on grounds that their contracts were for less than 3 months (see SSCB Act 1992 sch 11 para 2(b) (it was clear that, under the Statutory Sick Pay (General) Regulations 1982, SI 1982/894, the individuals were deemed to be employees for purposes of the SSCB Act 1992).

    The Court of Appeal has agreed with Thorn Baker. It has dismissed an ingenious argument by the Revenue as the authority responsible for enforcing liability to make statutory sick payments, effectively representing the employees. The argument was that the "3 month employment" condition had been removed by the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 sch 2 pt 1 para 1.

    The ingenuity of the argument was the suggestion that notwithstanding that those regulations specifically do not apply to agency workers (see reg 19), they had to be construed on their wording as removing the "3 month employment" qualification.

    The result is what the government later referred to as "a complex and inequitable position, whereby statutory sick pay is payable to individuals who are not agency workers, regardless of the length of their contract, and to agency workers with contracts in excess of three months, but it is not payable to agency workers with a contract lasting three months or less".

    The position is rectified by new rules effective from 27th October 2008 which effectively reverse the Court of Appeal decision noted above (the Fixed-term Employees (Prevention of Less Favourable Treatment) (Amendment) Regulations 2008, SI 2008/2776, in force 27th October 2008). The government expects that as many as 60,000 agency workers could benefit from this measure (see Hansard HL 20th October 2008, col 1019 re Fixed-term Employees (Prevention of Less Favourable Treatment) (Amendment) Regulations 2008).

    For relevant general notes go to Illness, sickness and accidents/statutory sick pay

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    updated October2008