Holiday Pay: Carrying Over when on Sick Leave

In Khan v Martin McColl, an Employment Tribunal ruled that Mr Khan, who had been on long-term sick leave, was not entitled to holiday pay as he had not requested it.  As such he had not been denied the entitlement.   

Mr Khan had a total of 6 weeks’ unused holiday from 2007 and 2008.  In 2008, Mr Khan went on long-term sick leave and later resigned in August 2009.  The employer paid Mr Khan in lieu of holiday which had accrued in the 2009 holiday leave year, but not in lieu of 2007 and 2008 as that holiday had not been carried over.  Mr Khan argued that he was entitled to be paid in lieu of the accrued but unused holiday for those years. 

The employer successfully argued that Mr Khan had never requested holiday during 2007, 2008 or 2009 and he was therefore not “denied” the right to take holiday, even though he was not aware of this right.  Furthermore, it was held that the claims for the holiday pay were out of time, as he should have brought his claim within 3 months of the end of each holiday year.  On this basis, it was found that employers can deny employees holiday pay for previous years if they make a payment in lieu for the last period of holiday. 

This is an Employment Tribunal judgment and it is quite likely that this matter will be appealed, particularly as it does not seem to be consistent with previous judgments in this area.  So any employer wishing to follow this approach, should use it with great caution.