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Long term sick leave - holiday carry over clarified

12 August 2015

The recent case of Plumb v Duncan Print Group Ltd UKEAT/2015/0071 has provided clarification over how and for how long employees on long term sick leave can accrue and take annual leave.

It has now been settled law for some time that workers who do not wish to take holiday during a period of sick leave must be able to take that holiday at a different time, even if that means carrying it over to another leave year. This was established in the European case of Pereda v Madrid Movilidad SA [2009] IRLR 959, and was adopted into the UK Working Time Regulations in the case of NHS Leeds v Larner [2012] IRLR 825.

However, this latest case provides clarification as to what exactly that will mean for employers. There was a question mark over how long such carry over could continue, despite some guidance from the EU in the case of KHS AG v Schulte [2012] IRLR 156 suggesting that leave could be postponed for up to 18 months.

In this most recent case the Claimant, Mr Plumb, had been injured at work, and was off sick from 26 April 2010 to 10 February 2014, when his employment terminated. During that period he did not request to take any annual leave until September 2013, when he sought to take all the holiday he would have accrued from 2010. His employer agreed to pay for holiday accrued in that leave year (2013/14) but refused to pay for any previous years’ holiday entitlement.

Mr Plumb brought a claim in the Employment Tribunal for those previous years’ entitlement. The Tribunal considered the authorities on this issue and found that Mr Plumb was not hindered from taking his annual leave during his sickness absence. In the case of Larner the Claimant was presumed to have been too ill to exercise her right to annual leave, and in the case of Pereda, the Claimant had had a heart attack and so was not able to go on holiday. Mr Plumb, however, had gone on holiday during his sickness absence in 2012 (although he did not request annual leave). The Tribunal held, therefore, that Mr Plumb’s annual leave for the periods prior to the 2013/14 leave year had lapsed and he was not entitled to them.

Employment Appeal Tribunal decision

Mr Plumb appealed to the EAT, who held that the Tribunal had erred in law by considering whether Mr Plumb was capable of requesting holiday as a result of his medical condition. The EAT held that was not necessary, and found that his employer should have paid Mr Plumb in respect of holiday accrued in the 2012/13 leave year as well. The EAT stated that:

  • European case law makes clear that an employee may be permitted to take annual leave during a period of sick leave, but cannot be required to do so;
  • The purpose of annual leave is to ensure the health and safety of workers to ensure that workers receive “actual rest”. It would not be consistent with the underlying purposes of the two rights to compel a person who is absent from work by reason of sickness to take annual leave at the same time if he did not wish to do so;
  • The case of Larner did not create a legal principle that an employee must be able to demonstrate that he is physically unable to take annual leave before he is treated as being able to carry over leave from one leave year to another;
  • An employee should not be able to accrue annual leave over a number of years and then take that leave many years later;
  • Limits on the carry over of annual leave will need to be enacted under legislation. However, the EAT held that regulation 9 of the Working Time Regulations 1998 should be amended to state that annual leave will need to be taken within 18 months of the end of the year to which it relates.

Comment

Leave has been granted for the parties to appeal to the Court of Appeal and so there may be further guidance on this point. For now, the EAT has clarified that a worker on long term sick leave does not need to demonstrate that he or she is not able to take annual leave in order to benefit from the carry-over from one leave year to another. However, that carry over is limited to 18 months from the end of the leave year to which the leave relates.

This is welcome clarification on what has been a sticky area for many employers. Unless Mr Plumb is successful in an appeal, there is now a long-stop of 18 months on the period in which annual leave that workers on long term sick leave can accrue.

We will update you, as and when there is any news of an appeal.