Animals glitching through single layer blocks

I created an animal farm on my SMP server. All the animal pins are one block deep with a fence around the top. The whole farm is surrounded by glass. The sheep in the middle of the farm (blue sheep) seem to be fine, no glitching. The sheep around the outside of the farm seem to be glitching out of the farms (yellow, green, black, cyan). Could this be because the outer farms are only one block thick, but that is still a glitch? I've had the sheep fall down the waterfall, so I know they are glitching out.