August 26, 2015

Holiday pay and sickness absence… again…

A few years ago there was a string of cases, some of which went to the CJEU, on whether or not those who are prevented from taking holiday entitlement because they are on long term sick lose it or whether they are entitled to carry it over.

The Claimant was employed until February 2014 but had been off on sick leave since April 2010 due to an accident. He did not ask for annual leave, or take any, until July 2013 when he wrote to the company asking to take the leave he had not taken since 2010. The Respondent agreed to pay for the annual leave for the 2013/14 year but no earlier. When the Claimant was dismissed he brought a claim for payment in lieu of annual leave entitlement for these years.

The Tribunal looked at the Court of Appeal decision in NHS Leeds v Larner and considered that the main issue was whether or not the Claimant was able to take his leave in those years due to sickness. It considered that it had insufficient evidence that he was not able to take the leave - he had had 3 operations, and was subsequently depressed but continued to work at weekends and did take a week’s holiday in 2012 in the UK. The Tribunal therefore came to the conclusion that he had been able to take his annual leave during these years and should have done so; his claim therefore failed.

On appeal to the EAT the Claimant argued that he was not required to establish that he was unable to take holiday because of his medical condition and that in order to be entitled to carry over the leave, it was enough to show that he was absent on sick leave and there was no requirement for him to elect to take it for him to remain entitled to carry it over.

The EAT agreed that the Tribunal had erred in law, when it reviewed the European and Domestic case law, and summarised the position in respect of annual leave and sickness. It held, considering the authorities, that employees did not have to demonstrate that they were physically unable to take the annual leave because of their sickness in order to be able to carry it over.

The next question was whether there was any limitation placed on the right to carry over leave. European case law imposes limits on the length of time within which leave can be carried over but the Claimant argued that no such limits had been provided for in UK legislation or in his Contract of Employment and therefore he should be allowed to carry over all the leave.

The EAT disagreed, noting that, although the relevant regulation in the Working Time Regulations provides that annual leave must be taken in the year in which it is due, it had also been established that this regulation has to be interpreted to include an exception for those on sick leave who are unable or unwilling to take their leave in the relevant year. However these need only go as far as required under the Working Time Directive which indicates a carry over of 18 months at most. The EAT therefore held that this limit should be read into the Regulations providing that they should only be able to take annual leave within 18 months of the end of the leave year in which it is accrued if they are off sick. Consequently the Claimant was entitled to a payment in lieu of annual leave for 2012/13 but no earlier.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.


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