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Summer is here and holidays yet again

10/07/2015
Perhaps not the sitting on the beach or just relaxing holidays we all think about at this time of the year but yet another holiday pay case.As many of our readers will be aware the Working Time Perhaps not the sitting on the beach or just relaxing holidays we all think about at this time of the year but yet another holiday pay case.

As many of our readers will be aware the Working Time Regulations 1998 (Regulations) set out the minimum entitlements for workers to paid annual leave. The current statutory entitlement is 28 days in each holiday year (pro-rated where only part of a year is worked). Because the Regulations specify that holiday must be taken in the leave year in which it accrues, many employers adopt a use it or lose it policy. However, such a policy can give rise to problems when the employee is on long term sick, or takes maternity leave and which more often than not will straddle leave years.

There has been a series of cases on the entitlements of workers who are unable to take their holiday because of long term sickness absence or maternity leave, including European Court of Justice cases which established general propositions that a worker did not lose their entitlement to leave if because of sickness or maternity leave they were unable to take it, and they were entitled to carry over that leave for up to 18 months. In 2012 the Court of Appeal in the case of Leeds NHS Primary Care Trust v Larner found that there was no requirement for an employee on long term sick to make a prior request to take holiday and that the employee who had been unable on account of sickness to take her leave that had accrued prior to her dismissal was entitled on termination to a payment in lieu of the untaken leave.

Many of us thought that was the end of the matter, and since then the exception has been reflected in contractual terms and holiday policies. But not so. In the case of Plumb v Duncan Print Group Limited reported earlier this week a question arose as to whether Mr Plumb, who had been on sick leave since April 2010 because of an accident, was entitled to be paid for leave he had not taken in 2010, 2011 and 2012. The Employment Tribunal accepted the argument of Mr Plumb's employer that there was insufficient medical evidence of him being unable to take his holiday and he could have requested that he take holiday leave at any time but chose not to do so. It may be the Tribunal was persuaded by the fact that despite Mr Plumb's 3 operations and being diagnosed as severely depressed, he continued to work at weekends and took a week's holiday in 2012.

Mr Plumb's appeal to the EAT was successful. Following a review of European and domestic case law the EAT concluded that the Tribunal had erred in law. The EAT held that an employee who is absent from work on sick leave is not required to demonstrate that he or she is physically unable to take annual leave by reason of the medical condition. The EAT indicated that this would be the case even if the employee's contract or legislation prohibited the taking of annual leave which coincided with sick leave, or the employee could under their contract of employment elect to take sick leave and be paid for that leave while on sickness absence. It is not unusual for employees on long term sick to request paid leave when their sick pay runs out and when this has been exhausted to continue their sickness absence.

The EAT also confirmed that as European case law indicates that at most 18 months carry over in circumstances of long term sick or maternity leave, Regulation 13(9) of the Regulations should be read as permitting a worker to take annual leave within 18 months of the end of the leave year in which it accrued where he or she was unable or unwilling to take annual leave because of sickness. In the circumstances Mr Plumb was entitled on termination to be paid in lieu of annual leave for the 2012/13 year, but no earlier.

The story does not end here because the parties were given leave to appeal to the Court of Appeal having regard to the wider importance of the issues and the nature of evolving case law.

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