Business Law: Marie Allen on holiday entitlements for the long-term sick

Marie Allen of Gotelee Solicitors.

Marie Allen of Gotelee Solicitors. - Credit: Archant

If they are off sick, how much untaken holiday can workers carry over to the following year? A recent case has clarified this.

To comply with the European Working Time Directive a worker on long term sick leave is entitled to carry over untaken statutory holiday from one holiday year to the next if sickness prevented them from taking their holiday.

Under the directive, workers are entitled to at least four weeks’ annual holiday (which can include Bank Holidays), whereas under the UK’s Working Time Regulations 1998 (WTR), which implement the directive, this was increased to 5.6 weeks.

This equates to 28 days’ holiday for a full time worker, which for most people now means 20 days plus Bank Holidays.

This raised the question of whether the right to carry over holiday applies to four weeks or 5.6 weeks leave and there were conflicting decisions on the point.

In Sood Enterprises Ltd v Healy, Mr Healy had suffered a stroke in 2010. Following a period of sickness absence he resigned in 2011.

He was contractually entitled to 28 days (5.6 weeks) holiday including Bank Holidays. Because his illness prevented him from taking all his leave in 2010, he had 17 days outstanding and 14 in 2011.

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Mr Healy requested a payment in lieu of his holiday but his employer refused and Mr Healy issued proceedings in the Employment Tribunal.

The Employment Appeal Tribunal has held that Mr Healy was entitled to be paid in lieu of untaken holiday, but this was limited to four weeks’ leave in accordance with the directive.

The UK government is proposing to amend the WTR to provide an express right to workers who have been unable to take annual leave due to sickness to carry that annual leave over to the next holiday year, and to receive a payment in lieu on termination of employment.

The government is proposing to restrict this to four weeks in accordance with the directive.

So the right to carry over from one leave year to the next because of illness will only apply to the four weeks laid down in the directive, not the extra 1.6 weeks in the WTR nor any more generous leave entitlement under the individual’s contract unless that contract or the employee handbook states otherwise.

For advice on employment law contact Gotelee solicitors.

: : Marie Allen is an employment lawyer at Gotelee Solicitors.