For some years now it has been well established that an employee who is off work on long term sick leave is entitled to accrue their minimum holiday entitlement under the Working Time Regulations (that is 28 days, inclusive of Bank Holidays for someone who works a 5 day week). In practice, this has often meant that employers have to pay the employee for the accrued holiday once the employment has come to an end. Please see our previous update on this issue here. However, a recent case has given answers to some of the unanswered questions.
As we reported, in 2010, an Employment Tribunal in the case of Khan v Martin McColl held that an employee lost their right to accrue holiday if they did not request it during the leave year in question. This was a controversial decision at the time as it appeared to undermine previous decisions of the European Court and the House of Lords – not something which Employment Tribunals should be doing!
Perhaps not surprisingly, the Employment Appeal Tribunal (EAT) have held in the recent case of NHS Leeds v Larner that there is no requirement for an employee who is off work due to sickness to request to take their holiday during the holiday year in question. They were entitled to a “right to enjoy a period of relaxation and leisure” which their ill health was preventing them from exercising. This applied even if there was a contractual provision preventing leave being carried forward.
The EAT did accept that if an employee was at work during a leave year and simply failed to request leave, they might lose their right to the leave. The difference was that an employee who is off sick had not had the opportunity to take their leave. This might give employers a ‘silver lining’ and assist where an employee has been sick for only part of a leave year, but the point would need to be tested in the courts.
The potential escape route for employers identified in Khan appears to have been effectively closed by the Larner case. However, it is likely that the decision will be appealed, so we will of course keep you informed of any developments.
Are you dealing with holiday pay issues for employees who are off sick? If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected])