Sickness during a period of annual leave

After the European Court of Justice’s decision in Pereda v Madrid Movilidad SA it appeared to be settled law that an employee who became ill during a period of annual leave remained entitled to treat the period of illness as sick leave and claim a replacement period of annual leave on his return.

However, in NHS Leeds v Larner the Employment Appeal Tribunal (EAT) was recently asked to consider whether a worker who was absent for a whole year due to sickness forfeited the entitlement to annual leave by failing to submit a request for leave before the end of the relevant pay year.

Mrs Larner had been signed off as sick for the whole of the leave year 2009/2010. Her employer dismissed her on grounds of incapacity due to ill-health but refused to pay her an amount in respect of her accrued but untaken annual leave on the basis that she had not made a formal leave request at any time during the relevant leave year.

The EAT held that Mrs Larner had been prevented from enjoying a period of paid annual leave by reason of sickness and accordingly she retained the "right to enjoy a period of relaxation and leisure" or payment in lieu on dismissal in the following leave year.

The EAT did comment as part of the judgement that the decision might have been different had the employee been fit for the whole leave year but failed to make a request for annual leave. Such cases are likely to be very rare and, in any event, Regulation 13(9) of the Working Time Regulations 1998 prohibits carry-over of annual leave. This would therefore lead to potential conflicts between the European legislation and the content of the domestic UK legislation.