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Case law: Ruling clarifies when and for how long annual leave can be carried forward by employees on sick leave


 

Employers will welcome clarification on whether and for how long employees on sick leave can carry forward untaken statutory annual leave under EU law.

 

An employee was off sick from April 2010 until his employment terminated in February 2014. He did not ask to take the statutory 20 days’ annual leave he was entitled to under EU law in any of the employer’s 2010, 2011 or 2012 annual leave periods (which ran from 1 February to 31 January). In July 2013, for the first time, he put in a request to take all his statutory annual leave accrued since 2010.

 

His employer paid him for leave untaken in the annual leave period 2013-14 (the year he made the request) but refused to pay him for the 60 days’ untaken leave from 2010, 2011 and 2012. When his employment terminated in February 2014 he claimed pay for those 60 days’ untaken annual leave from 2010 to 2012.

 

An employee is not entitled to carry their statutory 20 days’ annual leave forward unless they are on sick leave. If they are on sick leave they do not have to take their 20 days’ annual leave during the relevant leave period if they are unwilling or unable to do so (unless their terms of employment say otherwise). Instead, they can carry it forward and take it at a later date.

 

The Employment Appeal Tribunal (EAT) had to consider:

 

  • Whether the employee on sick leave had to show that he was unable to take his statutory 20 days’ annual leave because of his medical condition, or whether it was sufficient that he was absent on sick leave and chose not to take that annual leave when on sick leave.
  • Whether there is any limitation on the period for which an employee on sick leave may carry forward annual leave accrued in one year to subsequent years.

As to the first issue, the employer argued that the employee had continued to work 12-hour weekend shifts at B&Q despite his medical condition and, in 2012, had taken a week’s holiday. This showed the employee was able to take his statutory annual leave during each annual leave period, and could not therefore carry it forward.

 

The EAT said that an employee on sick leave does not have to be physically unable to take annual leave because of their medical condition in order to carry their leave forward. And if an employee on sick leave does not ask to take annual leave during a particular annual leave period the employer should assume the employee is unwilling to take it, the employee can therefore carry it forward on that basis.

 

As to the second issue, the EAT ruled that the right for an employee on sick leave to carry forward the statutory 20 days’ annual leave under the Working Time Directive and EU case law is not unlimited. At most, an employee can only carry annual leave forward within a period of 18 months after the end of the annual leave period in respect of which the annual leave accrued.

 

Workers unable or unwilling to take annual leave because they are on sick leave are therefore only permitted to take their 20 days’ statutory annual leave within 18 months of the end of the leave year in which it accrued.

 

The employee in this case was therefore entitled to be paid for untaken annual leave in 2012, but not untaken leave from 2010 or 2011.

 

The right to carry forward any holiday entitlement over and above the 20 days’ statutory holiday under EU law will depend on what the employee’s terms of employment say.

 

Operative date

  • Now

Recommendations

  • Employers must pay employees who are on sick leave for untaken 20 days’ statutory annual leave under EU law, even if the employee did not ask to take that annual leave in the relevant annual leave period
  • However, they only need to pay the employee if the request is made within 18 months of the end of the relevant annual leave period. If an employee fails to put in their request for accrued but untaken holiday within 18 months of the end of the holiday year in which they were off sick, the request can be refused

Case law: Plumb v Duncan Print Group Ltd [2015] UKEAT 0071_15_0807

 

For advice on any Employment Law issue, please contact Guy Salter on Guy.Salter@smesolicitors.co.uk

Added: 03 Aug 2015 15:37


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