21 Jul 2015

Employment

Sick workers cannot carry over holiday leave indefinitely

The Employment Appeal Tribunal has found that the right to take accrued but untaken holiday expires 18 months after expiry of a leave year. In Plumb v Duncan Print Group UKEAT/2015/0071, the EAT had to decide whether a worker who had been off sick for nearly four years, and who had not taken or requested any holiday, was entitled to be paid in lieu of all his unused holiday when his employment ended.

Background:

Mr Plumb was on sick leave from April 2010 until his employment ended in February 2014. He did not ask for annual leave until September 2013, when he requested permission to take the annual leave he had not taken since 2010. The employer agreed to pay for holiday in the current leave year but refused to pay for the 2010, 2011 and 2012 leave entitlements.Under the Working Time Regulations 1998 (“WTR”), workers are required to take their statutory holiday entitlement in the year it is due – it cannot be replaced by a payment in lieu other than when a worker leaves employment.An Employment Tribunal rejected Mr Plumb’s claim that the employer had breached the WTR by failing to pay him in lieu for his holiday entitlement from 2010 to 2012. Referring to NHS Leeds v Larner [2012] IRLR 825, the tribunal decided the relevant issue was whether Plumb was “unable” to take his holiday due to sickness, but there was no persuasive medical evidence to show this was the case. The fact that Mr Plumb had continued to work 12 hours at the weekend at his local B&Q store and went on a week’s holiday in 2012 also undermined his case. Plumb then decided to appeal.

What was the outcome of the appeal?

The EAT held that the Court of Appeal’s decision in Larner did not lay down a legal principle that employees on sick leave needed to demonstrate that their medical condition prevented them from taking annual leave. In addition, workers who do not “wish” to take holiday during sick leave can take it at a later date. However, Plumb was not entitled to holiday pay for 2010 to 2012 because the European Court in KHS AG v Schulte [2012] IRLR 156 had ruled that the right to carry over periods of annual leave in to subsequent years was not unlimited. The International Labour Convention allows holiday to be postponed for up to 18 months after the end of the leave year, so the working time regulations had to be read as permitting a worker to take annual leave within 18 months of the end of the leave year in which it was accrued but not taken because of sick leave.

So, what does this decision mean?

This decision clarifies the circumstances in which sick workers may be entitled to carry over accrued and untaken statutory holiday. Sick workers do not need to provide evidence that they were physically unable to take holiday. If they do not take or request holiday during sick leave, it is to be assumed that they are unable or unwilling to take it and, accordingly, that leave may be carried over to a subsequent holiday year.This decision also confirms that leave can only be carried over for 18 months from the end of the leave year. Accrued leave which goes beyond that cut-off period will lapse.

For further information please contact Daniel Wilde, Head of our Employment Department, on 01633 244233 or email wilded@hevans.com

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