The bad news is that this is yet another blog on a holiday pay case. The good news is that this time it is not about overtime, allowances, commission or any of the other things that now appear to be up for grabs in the holiday pay packet.
The latest case on holiday pay* has focussed on the old question of what rights an employee has to holiday if they are absent due to sickness.
Will an employee on sick leave have a right to carry over holiday?
It is quite common for the contract of employment to state that holiday must be taken within the current leave year and to prohibit, or limit, any right to carry forward untaken holiday. However, if an employee is absent due to sickness they will have the right to carry over their holiday entitlement, even if it means that it crosses over into the next leave year. This is because the right to paid annual leave is to protect health and safety so the employee has the right to keep their holiday entitlement for rest and relaxation purposes rather than to use it when recovering from illness.
Can an employee take their holiday when absent due to sickness?
Yes, the employee will have the option of taking their holiday entitlement even during a period when they are signed off sick. An employee may wish to do this for example when their entitlement to sick pay has expired..
Does an employee have to be too ill to take holiday?
One of the arguments put forward by the employer in the case* was that the employee should take their holiday during their sick leave unless they could show that they were actually too ill to do so. The argument was rejected. The employee could take their holiday if they were on sick leave, but there was no obligation on them to do so. It was their option.
Can all the holiday be carried over?
No, the right to carry over holiday from one leave year to the next is limited to four weeks. Contractual entitlement to more than four weeks holiday may be lost depending on the individual’s terms and conditions. The reason that only four weeks is protected is because that is the minimum period of holiday that is recognised under European law as being necessary to protect the worker’s health and safety.
For how long can the holiday accrue?
If the employee on long-term sick leave was able to accrue four weeks holiday entitlement year after year indefinitely they would accumulate such an amount of holiday that it would no longer reflect any health and safety benefit. The employee would either have a disproportionate amount of holiday to take when they returned to work or they would have a windfall payment on their employment coming to an end. In order to retain the connection with health and safety it was held the employee would only be allowed to take holiday within a period of 18 months from the end of the leave year in which it had accrued.
*Plumb v Duncan Print Group Ltd Employment Appeal Tribunal 8 July 2015