Holidays for Sick Workers: If You Don’t Ask, You Don’t Get

Workers on sick leave must ask to take their statutory holiday entitlement or to carry it over, otherwise they will lose it the EAT has ruled.

In Fraser v South West London St George’s NHS Trust the EAT held that an employee who had failed to exercise her right to take statutory holiday during sick leave lost her entitlement. The right to take holiday was lost at the end of the leave year in which it accrued, as was her right to be paid for it. Although an employee on sick leave is entitled to carry over statutory holiday which they have been unable or unwilling to take, they can only do so if they ask.

Mrs Fraser went off sick in November 2005 and did not return to work before her dismissal in October 2008. When her employment terminated, her employer paid her in lieu of holiday which accrued in the final year of her employment but not for holiday which accrued in the previous two years. Mrs Fraser brought a tribunal claim for unpaid holiday pay.

The employer accepted that the employee had accrued the right to take statutory holiday whilst sick but argued that as she had not given notice to take it, she lost her entitlement at the end of the holiday year in which it accrued, together with the right to be paid for it. The employment tribunal agreed, as did the EAT.

Employees are only entitled to be paid for holiday they have actually taken. Whilst the ECJ Pereda case makes it clear that an employee who is off work sick can choose either to take holiday whilst sick or to take it at a later date (including in a subsequent leave year), the employee must make that choice, otherwise they lose their entitlement.

Whilst this case is good news for employers, there are a number of conflicting cases at EAT level on this question which means that the position remains open to argument. Earlier this year the EAT in NHS Leeds v Larner came to the opposite view. That case is being appealed to the Court of Appeal which will hopefully resolve the conflict once and for all but unfortunately that may not be for come time. In the meantime, employers should approach each case on its merits, taking into account the comparative cost to the business of paying in lieu and defending employment tribunal claims.