Holidays and Sick Workers: No Need to Ask to Carry Over Holiday

The Court of Appeal has cleared up an outstanding issue over the holiday rights of sick workers and has confirmed that they do not have to ask to carry over holiday they have been unable to take due to sickness.

In NHS Leeds v Larner, L went on sick leave in January 2009 and did not return to work before her dismissal in April 2010 so was unable to take her 2009/10 annual leave.  She claimed that she was entitled to be paid in lieu of her untaken statutory holiday entitlement.  Her employer argued that she was not entitled to the payment as she had not asked to take the holiday or to carry it over. 

This argument was rejected by the employment tribunal, the EAT and has now been rejected a third time by the Court of Appeal.  The Court of Appeal held that there was nothing in the Directive or EC case law which requires an employee to request leave if they want to carry it forward due to sickness.  L was entitled to take her holiday at another time when she was not sick, if necessary after the leave year in which it accrued.   As she had not been able to take the holiday before her employment was terminated she was entitled to payment in lieu on termination.   

The Working Time Regulations 1998 (“WTR”) do not permit untaken holiday to be carried over.  Although the CA in this case decided that L could rely directly on the Directive to enforce her rights as she was employed by a public sector employer, it also said that it was possible to construe the WTR to give effect to the Directive - and to allow holiday untaken due to sickness to be carried over and paid in lieu if still untaken on termination. The decision therefore applies equally to employers in the private sector.

However, there are limits on the amount of holiday that sick employees can carry over where they have been unable to take it.  ECJ case law has held that they must be allowed to carry over more than a year’s entitlement but how much more is unclear - although 15 months has been held to be acceptable.  

The CA declined to consider whether the position was the same for the additional 1.6 week's leave provided under the WTR as this issue had not been raised previously – although the current weight of authority suggests that the additional leave can be treated differently, meaning that employers can choose only to allow carry over of the basic four week entitlement.