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Sickness Absence and Statutory Holidays

If a worker is absent through long-term sickness, how much of their statutory minimum holiday can they carry forward to the next holiday year?

A recent EAT case has considered whether a worker can carry forward all statutory holiday granted by the Working Time Regulations 1998 (5.6 weeks) or just that granted by the European Working Time Directive (4 weeks).

The EAT found that carry over was limited to 4 weeks, unless there was an agreement between the parties allowing holiday to be carried over.

Sickness Absence and Statutory Holidays

After a brief period of inactivity, the issue of accruing and carrying over holidays whilst absent through long-term sickness has again been considered by the Employment Appeal Tribunal (“EAT”).

Case law has developed in such a way that workers are entitled to accrue and carry forward their statutory holiday if they are unable to take it due to sickness absence. European cases have suggested that this can be subject to a reasonable time limit, although the UK Government has yet to legislate for this.

The European Working Time Directive grants workers a minimum of 4 weeks annual leave and is reflected in Regulation 13 of the Working Time Regulations 1998 (“WTR 1998”). However, the UK ‘gold plated’ this right, adding 1.6 weeks additional annual leave via Regulation 13A WTR 1998. A recent EAT case considered whether the right to carry forward leave accrued whilst absent applies to all 5.6 weeks or just 4 weeks.

Sood Enterprises Ltd v Healy

The Employer ran a chain of filling stations and a car wash, with Mr Healy employed as a handyman/car wash worker. Mr Healy suffered a stroke in July 2010 and commenced a period of sickness absence.

Mr Healy wrote to the employer in April 2011 requesting holiday pay for 2010 and 2011 and was told that he could not be paid holiday whilst his employment was ongoing. Consequently, Mr Healy resigned by letter of 6 June 2011.

The employer’s holiday year ran from 1 January to 31 December. Following his resignation, Mr Healy was not paid any accrued holiday pay – his employer arguing that he was not entitled to it as he failed to provide the correct notice.

At an Employment Tribunal, it was found that Mr Healy had taken 11 days holiday in 2010, leaving 17 days untaken and no holiday in 2011, meaning he was owed 14 days pro-rata up to the date of termination. He was therefore awarded 31 days holiday pay.

The employer appealed to the EAT, arguing that holiday calculations in these circumstances should be based upon the 4 week minimum period and not 5.6 weeks. They further submitted that the 1.6 weeks additional leave can only be carried forward if there is a relevant agreement between the parties to this effect.

Decision

The EAT agreed with the employer in relation to the 2010 holiday year.

Regulation 13A WTR 1998 allows the 1.6 weeks additional leave granted by the UK to be carried forwards only where there is an agreement. There was no agreement between the parties and, irrespective of sickness absence, this could not therefore be carried forward. Mr Healy was entitled to receive 9 days holiday pay for 2010 instead of 17.

The EAT upheld the Tribunal’s decision in respect of the 2011 holiday year, meaning that Mr Healy was entitled to a pro-rata entitlement based upon 5.6 weeks statutory leave. Mr Healy’s compensation was reduced from £1,323.70 to £982.10

Comment

The EAT’s decision answers the question left open by previous case law in the EAT, namely whether the European Directive requires carry-over of 5.6 weeks’ leave or just 4 weeks where a worker is prevented from taking holiday due to long-term sickness absence.

The decision means that, unless there is an agreement to allow a worker to carry forward part of their entitlement under the WTR 1998, workers will only be entitled to accrue and carry forward 4 weeks holiday.

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