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• Neil Buck
• HR Updates
• August 1, 2012

Case Law – Employees on sick leave can carry forward holiday and do not need to make a specific request

by Neil Buck

 

Employees on long-term sick leave are entitled to automatically carry forward annual leave into the next holiday year, the Court of Appeal has ruled.

 

NHS Leeds v Larner

Facts

Larner worked part-time for the NHS trust when she went on sick leave in January 2009. Her terms and conditions stated that she would accrue annual leave during sick leave, but that it could only be carried over in exceptional circumstances.

Larner eventually had her employment terminated in April 2010, and was told that “a payment in lieu of notice and any outstanding leave will be made to you”.

Larner originally brought an employment tribunal claim for unpaid holiday pay under the Working Time Regulations 1998, because NHS Leeds had not paid her for leave that was accrued in the April 2009 to March 2010 holiday year.

Decision

Larner was successful in her claim but NHS Leeds appealed. However, both the Employment Appeal Tribunal and Court of Appeal have now rejected the employer’s argument that Larner lost her statutory holiday entitlement, as she had not made any requests to take annual leave or carry it over. The court  confirmed that unused holiday should be carried over even if the member of staff has not requested it. In this case it meant that when clerical worker Janet Larner was dismissed, she was also entitled to be paid for the holiday accrued during her sickness absence that she had not been able to take.

Comment:  Clearly the ruling, while providing clarity, will have cost implications for employers and will not be welcomed by employers, given the practical advantages of requiring workers to make such requests. Allowing long-term sick employees to carry leave forward automatically and to be paid for all the leave that has accrued on termination of employment could be very costly for employers.  T

This decision opens the way for employees on long-term sickness absence to claim holiday pay for the whole period of their absence when their employment terminates. For an employee who has been absent for two leave years for example, this could represent nearly three months’ pay.

Ironically is it unlikely to be an advantage overall to long-term sick employees asw ell since employers will now have more incentive to dismiss rather than allow sick leave to roll on and holiday to accrue unchecked.

This decision in the UK follows a separate ruling on sick leave and holiday entitlement in the Court of Justice of the European Union, which we mentioned in last month’s bulletin. In the case of Anged v Fasga, the CJEU held that a worker who becomes sick while on a scheduled holiday from work is entitled to take that annual leave at another time when they are not ill.