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Carrying over holiday entitlement when on sick leave – how much and when?

HolidaysSUMMARY: In the recent case of Plumb v Duncan Print Group Ltd UKEAT/2015/0071, the EAT dealt with the issue of a sick worker’s right to carry over holiday entitlement.

Holiday is a hot topic for employers – recent decisions on holiday pay have led many employers to re-think how overtime could be taken into account in such payments.

However, an equally vexing problem which employers need to solve is how to deal with the holiday entitlement of those workers who are on sick leave. The EAT considered this in the recent case of Plumb v Duncan Print Group Limited.

Background

As a reminder, there are the following important principles to take into account when considering a sick worker’s entitlement to annual leave:

  1. Workers are generally only entitled to take annual leave in the leave year in respect of which it is due. For example, if the leave year is between January and December, an employee must take all of their annual leave entitlement by the end of December.
  1. An exception to the principle in point 1 is that annual leave may be carried over where the worker was unable or unwilling to take annual leave because he was on sick leave and as a consequence did not exercise his right to annual leave. The worker does not have to have made a request for annual leave in order to carry it over.
  1. On termination of employment, if the worker is entitled to annual leave in respect of any previous leave year which was carried over because of sick leave, the employer should pay the worker in lieu of that annual leave.

When considering carrying over annual leave, we are only referring to carrying over the 4 weeks of annual leave that a worker is entitled to under the (European) Working Time Directive, not the additional 1.6 weeks that a worker is entitled to under the (British) Working Time Regulations or any additional contractual annual leave.

Where clarity was required

There were 2 areas which needed clarity:

  1. How far back should a payment in lieu of holiday go on the employment ending?

In relation to point 3 above, it is clear that a worker should be paid in lieu for holiday they were unable to take because of sick leave.  What was not clear before this case, was how far back a worker could claim holiday for.  To take an extreme example, if they had been off sick for 5 years and had not taken any holiday, if their employment was terminated in the sixth year, could they claim a payment in lieu of all the 5 years of holiday they had been unable to take?

  1. Should a worker unwilling but able to take annual leave be entitled to carry over holiday?

Another point which required clarity was whether a worker who was unwilling to take annual leave during sick leave should be permitted to carry it over, even if he would have been physically able to take the annual leave during the sick leave period, had he chosen to do so.

Facts of the case

Mr P (the employee) was on sick leave between 26 April 2010 and 10 February 2014, when his employment terminated.  Mr P did not take or request any holiday until summer 2013 when he requested permission to take all of his accrued holiday from 2010 onwards.  The employer agreed to pay for accrued holiday for the current leave year (2013/2014) but refused to pay for untaken holiday for the previous 3 leave years.  The leave year ran from 1 February to 31 January.

Mr P brought a claim for payment in lieu of untaken leave for the 2010/2011, 2011/2012 and 2012/2013 leave years. The employment tribunal dismissed his claim and he appealed to the EAT (Employment Appeal Tribunal).

Decision

The EAT allowed Mr P’s appeal in respect of accrued leave for the 2012/2013 holiday year (i.e. he would be entitled to a payment in respect of these years), but dismissed his appeal in respect of accrued leave for the previous two holiday years.

The EAT made it clear that:

What does this mean for employers?

Cases

Plumb v Duncan Print Group Ltd UKEAT/2015/0071

Contact Details

For more details about holiday leave entitlement and its interaction with sick leave please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice.

Updated: by FG Solicitors
Call us on:  0808 172 93 22

CARRYING OVER HOLIDAY ENTITLEMENT WHEN ON SICK LEAVE – HOW MUCH AND WHEN?

HolidaysSUMMARY: In the recent case of Plumb v Duncan Print Group Ltd UKEAT/2015/0071, the EAT dealt with the issue of a sick worker’s right to carry over holiday entitlement.

Holiday is a hot topic for employers – recent decisions on holiday pay have led many employers to re-think how overtime could be taken into account in such payments.

However, an equally vexing problem which employers need to solve is how to deal with the holiday entitlement of those workers who are on sick leave. The EAT considered this in the recent case of Plumb v Duncan Print Group Limited.

Background

As a reminder, there are the following important principles to take into account when considering a sick worker’s entitlement to annual leave:

  1. Workers are generally only entitled to take annual leave in the leave year in respect of which it is due. For example, if the leave year is between January and December, an employee must take all of their annual leave entitlement by the end of December.
  1. An exception to the principle in point 1 is that annual leave may be carried over where the worker was unable or unwilling to take annual leave because he was on sick leave and as a consequence did not exercise his right to annual leave. The worker does not have to have made a request for annual leave in order to carry it over.
  1. On termination of employment, if the worker is entitled to annual leave in respect of any previous leave year which was carried over because of sick leave, the employer should pay the worker in lieu of that annual leave.

When considering carrying over annual leave, we are only referring to carrying over the 4 weeks of annual leave that a worker is entitled to under the (European) Working Time Directive, not the additional 1.6 weeks that a worker is entitled to under the (British) Working Time Regulations or any additional contractual annual leave.

Where clarity was required

There were 2 areas which needed clarity:

  1. How far back should a payment in lieu of holiday go on the employment ending?

In relation to point 3 above, it is clear that a worker should be paid in lieu for holiday they were unable to take because of sick leave.  What was not clear before this case, was how far back a worker could claim holiday for.  To take an extreme example, if they had been off sick for 5 years and had not taken any holiday, if their employment was terminated in the sixth year, could they claim a payment in lieu of all the 5 years of holiday they had been unable to take?

  1. Should a worker unwilling but able to take annual leave be entitled to carry over holiday?

Another point which required clarity was whether a worker who was unwilling to take annual leave during sick leave should be permitted to carry it over, even if he would have been physically able to take the annual leave during the sick leave period, had he chosen to do so.

Facts of the case

Mr P (the employee) was on sick leave between 26 April 2010 and 10 February 2014, when his employment terminated.  Mr P did not take or request any holiday until summer 2013 when he requested permission to take all of his accrued holiday from 2010 onwards.  The employer agreed to pay for accrued holiday for the current leave year (2013/2014) but refused to pay for untaken holiday for the previous 3 leave years.  The leave year ran from 1 February to 31 January.

Mr P brought a claim for payment in lieu of untaken leave for the 2010/2011, 2011/2012 and 2012/2013 leave years. The employment tribunal dismissed his claim and he appealed to the EAT (Employment Appeal Tribunal).

Decision

The EAT allowed Mr P’s appeal in respect of accrued leave for the 2012/2013 holiday year (i.e. he would be entitled to a payment in respect of these years), but dismissed his appeal in respect of accrued leave for the previous two holiday years.

The EAT made it clear that:

  • Sick workers can carry over untaken holiday leave for 18 months after the end of the leave year.
  • Sick workers are not required to demonstrate that they are unable to take their holiday.  They can choose not to take holiday during sick leave.

What does this mean for employers?

  • Employers now have more clarity on how much annual leave an employee can carry over from previous years.  Taking the example given earlier, an employee on the termination of their employment would not be entitled to payment in lieu of annual leave for the entire 5 years they had been off sick.  They could only carry over untaken holiday leave for 18 months after the end of the leave year and on termination would be entitled to a payment in lieu of this holiday.  A practical example of this would be:
    • The leave year runs between 1 January and 31 December.
    • Mr A has a full time contract and is off sick from 1 January 2010 until his dismissal on 1 January 2015.
    • Mr A has not taken any annual leave in this 5 year time period and his contract of employment does not state anything about carrying over annual leave.
    • Mr A would be entitled to a payment in lieu of 8 weeks annual leave on the termination of his employment.  This relates to the annual leave for the leave year ending 31 December 2013 and for the leave year ending 31 December 2014.
  • Employers should check their contracts of employment in relation to the carry-over of holiday entitlement.  If employers allow more carry-over of annual leave than is necessary, employers may want to amend these contracts.  Contracts should also not set out that carry-over of annual leave is never permitted.
  • Employers should permit workers to carry over untaken annual leave while they are on sick leave even if they consider that workers would have been able to take this annual leave had they chosen to do so. Whether to take annual leave during sick leave is a decision for the worker and they are entitled to choose not to take the annual leave even if they would have had the ability to take it.  They are also not required to request the annual leave if they wish to carry it over.

Cases

Plumb v Duncan Print Group Ltd UKEAT/2015/0071

Contact Details

For more details about holiday leave entitlement and its interaction with sick leave please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice.