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Light shed on holiday rights of sick employees

This summer there has been some interesting case law on the question of employee rights to holiday or payment in lieu of holiday when on sick leave. The principle that the purpose of paid annual leave is to enable the worker to enjoy a period of rest and enjoy a period of relaxation and leisure is well established; as is the principle that entitlement to sick leave is to ensure that the worker can recover from an illness that has caused him to be unfit for work.

Asociación Nacional de Grandes Empresas de Distribución, a European case, confirms that where an employee falls ill during their annual holiday leave, they are entitled to take additional holiday at a later date, for a period equivalent to the sick leave taken during annual leave.

Many employers already allow this; however employment contracts and handbooks will now need to be updated to reflect this development.

NHS Leeds v Larner, a Court of Appeal case, dealt with the issue of whether an employee who was off sick for the whole of a leave year therefore did not take any holiday was entitled to accrued but untaken holiday pay for the leave year, on dismissal the following year. NHS Leeds contended that she was entitled to any payment in lieu of accrued but untaken holiday pay,  this was on the basis that she had not requested any holiday leave neither had she requested for the holiday to be carried over to the following year, therefore she lost her right. Mrs Larner brought a claim for payment in lieu of accrued but untaken holiday pay.

The Court of Appeal reviewed the case law in the area to provide certainly on the matter for not employers and employees alike. The employers argument was rejected on the basis that the purpose for holiday and sick leave are different, the former is for leisure and relaxation, the latter is to recuperate from ill health.

Neither the Working Time Regulations, nor the underlying EU Directive, requires an employee who in unable to take leave due to sickness, to make a formal request of leave or request holiday entitlement to be carried forward as a condition for taking it at a future date or to be paid in lieu. 

It should be noted that this was a public sector case, and Article 7 of the Working time Directive has direct effect; however, the Court did take the view that the domestic law can be interpreted to give effect to Article 7.

Moving forward from Larner the issue which remains to be determined is whether the ruling applies just to the basic 20 days leave originally provided for in the Working time Regulations, or whether it also applies to the additional 8 days added later.


Samira Cakali

Samira Cakali is a pragmatic and approachable solicitor advocate with extensive contentious and non-contentious experience in the fields of employment law as well as civil litigation, within a range of commercial businesses from SME’s to multinationals as well as senior executives.

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