HOLIDAY AND SICKNESS
SummaryThis case is part of a series of UK and European decisions on the issue of holiday and sickness absence and how domestic law (in the form of the Working Time Regulations 1998 (“WTR”)) interacts with EU case and legislative law.
Does a worker on sick leave have to give notice to carry over untaken leave?
This case is part of a series of UK and European decisions on the issue of holiday and sickness absence and how domestic law (in the form of the Working Time Regulations 1998 (“WTR”)) interacts with EU case and legislative law. Now a UK case has come before the Court of Appeal looking at the contentious issue of whether a worker off sick has to request to carry over holiday they cannot take because of sickness, to another leave year – or do they “use it or lose it”?.
Sickness and Holiday: a Recap
What did we know?
- If a worker is off on long term sick, they continue to accrue WTR holiday during their period of sickness absence (Stringer case);
- Carry over or accrual when on sick leave only applies to basic WTR holiday (28 days); it does not apply to any enhanced contractual holiday (unless your contract provides for it);
- Accrued but untaken holiday will be paid in lieu only on termination of employment; and
- If an employee is sick prior to or during a period of pre-booked holiday, they are entitled to carry forward that period of holiday – this includes to another leave year (Pereda and ANGED v Federación de Asociaciones Sindicales and ors).
- Does a worker on sick leave have to formally request to carry over holiday they are unable to take to another leave year?
- If a worker on sick leave wishes to take holiday, do they have to request it in the “usual” way?
- If a worker is off on sick leave and could take their holiday but is unwilling to, do they lose the right to accrue holiday?
- How much holiday can a worker on sick leave carry over? (currently under the WTR an employer may allow 1.6 weeks of holiday to be carried over)
- When does any holiday carried over have to be taken by?
Janet Larner went on paid sick leave in January 2009 and was dismissed in April 2010 whilst she was still off sick. She was therefore absent during the whole of the holiday year 2009/10 and accrued her WTR holiday (which was 4 weeks at that time). Although her employers accepted her right to accrue holiday during sick leave continued, Ms Larner had not requested to carry over any holiday to the holiday year 2010/11 and therefore, it said, she had lost the right to be paid for any accrued annual leave on termination of employment.
Court of Appeal
The Court of Appeal has held that where a worker is unable to take their WTR annual leave due to sickness they do not have to make a request to carry over any untaken leave to be paid in lieu of holiday on termination of employment. Their decision is based on their interpretation of the Working Time Directive (the “Directive”) against the UK’s WTR. It found that the Directive did not require a worker, prevented from taking holiday because of illness, to request to carry over holiday to another leave year. Therefore Ms Larner was entitled to (1) take her annual leave at another time when she was not sick, (2) if necessary, carry over any holiday to another leave year or (3) be paid it on termination of employment.
Public –v- Private Employers
The Larner decision concerns a public employer and therefore the impact of this decision will have “direct effect”. This means that public workers may automatically rely on this decision without having to argue that UK law should be interpreted in line with EU law. For private employers, this decision will not be directly applicable to them. However, the Court of Appeal has said that UK courts should interpret the WTR and EU law “purposely”. This is likely to mean that for private employers, the WTR will be interpreted in the same way so as to give workers their full protection regardless of their employer.
What do we know following Larner?
We now know that as well as workers on sick leave accruing holiday, they also have the right to carry over holiday untaken because of sickness to another holiday year WITHOUT having to ask their employer. The “use-it-or-lose-it rule” does not apply in the case of workers on sick leave. It also seems that they are entitled to carry over all of their WTR holiday to another holiday year (if on sick) – not just 1.6 weeks currently allowed under the WTR.
What is still unclear?
There are still three issues remaining:
- If a worker on sick leave wishes to take holiday, do they have to follow employer holiday procedures? It may be sensible to include something within a holiday policy which asks a worker off sick to request to take holiday if only for administrative purposes so that the worker can be paid holiday pay (and not sick pay). However, we would not recommend enforcing this point against a worker off sick.
- Can an employer “challenge” a worker who claims they cannot take holiday because of illness? There was reference made in the Larner judgment that Leeds NHS had not challenged evidence that Ms Larner was unable to take her holiday during 2009/10 due to ill health. It would appear sensible for an employer to remind a worker off sick of their right to take holiday and if necessary, investigate why a worker cannot take holiday whilst off sick. If a worker is able to take holiday but unwilling to do so, there may be an opportunity to argue the worker has lost their right to carry over holiday. This will require medical evidence asserting the employee is able to take some form of “holiday”. We would suggest however, that this situation would be very rare.
- How long can workers off sick carry over holiday? This is still up for debate at this stage and was not considered in Larner. There is some conflict in EU case law as to whether a worker off sick is entitled to carry forward accrued holiday for 15 or 18 months. Under the WTR there is no right to carry over holiday, although an employer may allow 1.6 weeks to be carried forward. Until domestic law changes, the WTR position is still applicable for those not off sick; however, employers may decide to err on the side of caution and allow a carry over of 15 months for those off sick (although noting that this period may change following a Government Review).
The Government has proposed amending the Working Time Regulations to reflect ECJ case law in the “Modern Workplaces” consultation, to which its response is still awaited. At present we are left in an uncomfortable situation where those on sick leave are being treated more favourably that those workers who are not or on statutory leave (i.e. maternity). For example, those off sick during a leave year may carry over all their WTR holiday entitlement; however, those at work cannot not (unless their employer allows 1.6 weeks to carry over). There are still a lot of questions still left to be answered in this area.