There has been significant case law on this topic in the last 12 months.  We now have a further decision, albeit only a Tribunal decision, which sheds some guidance on dealing with such cases for employers.

Workers are entitled to 5.6 weeks statutory holiday under the Working Time Regulations.  The Regulations indicate that such leave can not be carried over from one holiday year to the next and that a worker can not be paid in lieu of unused holiday unless their employment is being terminated.

Where an employee is not permitted to take such holiday they can bring claims for compensation under the Working Time Regulations, or as an unlawful deduction from wages claim.  The advantage of bringing a claim under the latter  provision is that they are able to bring a claim within 3 months of the last deduction being made and therefore often have a longer period in which to make the claim. 

The ECJ confirmed that workers on long term sick leave continue to accrue annual leave rights whilst on sick leave.  In the event they are prevented from taking their holiday entitlement due to sickness absence, they are entitled to carry it over into the next holiday year.  In the event that they are unable to return to work they can be paid in lieu of the holiday entitlement when their employment ends.

In the recent Tribunal case the employee had been on long term sick leave, resigned and was paid holiday pay that he had accrued in the last holiday year of his employment.  The employee claimed that he had been denied holiday and sought to claim holiday pay for previous holiday years.  As he had not specifically requested to take holiday leave at the time he was entitled to take it, the tribunal concluded he had not been “denied” holiday.  In paying his holiday pay for the last holiday year, his employer had “broken” the series of deductions, rendering his claim for earlier unpaid holiday out of time.

Although the decision is not binding, it is likely to be followed by other Tribunals.  Employers will be heartened to see the stance currently being taken is that workers must request holiday leave whilst on sickness absence and during the relevant holiday year to be entitled to it. An employer is currently under no obligation to advise his workers of this right. They should also ensure that should an employee leave before returning from sick leave, that any accrued but untaken holiday pay in the last holiday year is paid promptly.  In doing so an employer can potentially deprive a worker of claiming holiday pay for previous leave years.

Posted: August 6th, 2010 under Employment/HR.
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