It's a fine line because if he gets attention for the behaviour it could just magnify it, but you HAVE to deal with it! Do you have a timeout system in your daycare or how do you handle behaviour issues? I talk to the parents about EVERYTHING like this and tell them that it cannot be tolerated and that they want their child to learn how to behave properly so they can grow into a wonderfully behaved child and adult. You cannot just ignore him completely, but hopefully it is a phase because he doesn't feel well right now as you mentioned. I would definitely remove privileges and teach him that it is not acceptable. I do use timeouts but keeping in mind that toddlers have the attention of a fruitfly, so they are very short, but I talk to them sternly about the problem and don't let them go play again until they promise to be 'nice'.