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MILS Case Study: Carrying Over Holiday Pay When SickBack

MILSLogo2The Employment Appeal Tribunal (EAT) has this week clarified two issues affecting the rights of workers on long-term sick leave to carry forward untaken annual leave under the Working Time Regulations 1998 (WTR).

Firstly, the EAT has confirmed that a worker on sick leave can carry forward untaken leave (the four weeks’ leave granted by regulation 13 of the WTR) into a new holiday year under the WTR even if the worker was capable of taking annual leave. It follows that the principle set out by the Court of Appeal in the case of NHS Leeds v Larner applies to those who are unwilling to take annual leave during sickness absence as much as those who are unable to do so.

Secondly, the EAT says that such untaken leave cannot be carried forward indefinitely. European law only requires, at most, that employees on sick leave are able to take annual leave within a period of 18 months of the end of the leave year in respect of which the annual leave arose. Consequently, the WTR are to be read as permitting a worker to take annual leave within 18 months of the end of the leave year in which it is accrued where the worker was unable or unwilling to take annual leave because he was on sick leave and, as a consequence, did not exercise his right to annual leave.

Facts of the case

The case came about when the claimant claimed a payment in lieu of untaken leave when his employment came to an end after a long period of sickness absence. His leave year ran from 1 February to 31 January each year. His sickness absence began on 26 April 2010 and ended with the termination of his employment on 10 February 2014. During that period he did not take any annual leave.

The EAT ruled that the claimant was entitled, under WTR r14, to a payment in lieu of leave that accrued in the 2012/13, 2013/14 and 2014/15 leave years but not the leave that accrued in the 2010/11 and 2011/12 leave years.

Interestingly the EAT gave both parties permission to appeal to the Court of Appeal (although not in respect of the decision concerning the 2013/14 and 2014/15 leave years). It remains to be seen whether either party will, in fact, appeal.

Plumb v Duncan Print Group Ltd, EAT, 8 July 2015

Andrew Macmillan, Solicitor, Motor Industry Legal Services

Posted by Sue Robinson on 10/07/2015