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    Are Employees on Long-term Sick Leave Entitled to Holiday Pay?

    Until the very recent case of Plumb v Duncan Print Group Limited there have been two very conflicting Employment Appeal Tribunal decisions, that were both heard in 2011.
    These were;

    1. In the case of NHS Leeds v Larner, Mrs Larner worked under a contract of employment, for 20 hours per week. A term in her contract confirmed that she would “accrue annual leave during sick leave” but that only in “exceptional circumstances” “could it be carried over into the next holiday year.
      * NHS Leeds holiday year ran from 1 April to the 31 March.*

    Mrs Larner went on sick leave from 5 January 2009 but on 6 April 2010, NHS Leeds dismissed her, confirming that they would make a “payment in lieu of notice and any outstanding leave.”

    Mrs Larner filed an Employment Tribunal claim for unpaid holiday pay under the Working Time Regulations 1998, on the basis that NHS Leeds had not paid her for holiday leave that had accrued in the 1 April 2009 to 31 March 2010 holiday year.

    NHS Leeds defended the claim, on the basis that Mrs Larner did not make any holiday requests for that period, nor had she asked to carry the leave forward. In the circumstances, the Trust contended that Mrs Larner’s annual leave entitlement was forfeited at the end of 2009/2010 holiday year.

    The Court of Appeal held that Mrs Larner was entitled to be paid her annual leave, because she was on sick leave and therefore, could not take it. In these circumstances, the holiday carried forward to the next year automatically.

    1. In Fraser v South West London St George’s Mental Health Trust, Ms Fraser was a nurse who, after an accident at work, went on long term sick leave.

    However, the Trust dismissed Ms Fraser in October 2008. Ms Fraser filed a number of Employment Tribunal claims which included unlawful deduction from wages in respect of her holiday entitlement under the Working Time Regulations.
    * The Employment Tribunal dismissed Ms Fraser’s claims on the grounds that; *

    a) She had not complied with S32 (2) of the Employment Rights Act 1996 b) She had given no notice of her intention to take annual leave for the period, as is required under Regulation 15 of the Working Time Regulations.

    The case proceeded to the Employment Appeal Tribunal and it was subsequently held that an employee could only carry leave forward, if they specifically asked to do so.
    * Plumb v Duncan Print Group Limited *

    The EAT has held in the Plumb v Duncan Print Group Ltd case that a worker on sick leave is entitled to be paid in lieu of accrued unused annual leave when their employment is terminated and they do not have to prove that they cannot take the holiday leave, due to their illness.

    However, very importantly, the EAT has held that the period of annual leave cannot be carried over for an indefine period – on the contrary, it could only be carried over for 18 months from the end of the leave year in which it accrued.
    The facts.

    Mr Plumb worked for the Print Group Limited as a printer but went on sick leave from April 2010, complaining of work related stress.

    However, in February 2014, Mr. Plumb’s employment was terminated. Mr Plumb asked his employer to pay all of his accrued annual leave dating back to 2010 but they only paid him, for his entitlement for the 2013/14 holiday year. In the circumstances, Mr Plumb filed an Employment Tribunal claim for a payment representing all of accrued leave between 2010 and 2013.

    The Employment Tribunal dismissed the claim, which resulted in Mr Plumb applying to the Employment Appeal Tribunal.

    There were two main points raised in the appeal;

    1. Firstly – was it sufficient for a sick employee simply to choose not to take holiday, as opposed to being medically unable?

    2. Secondly – is there a limitation on how many years’ worth of untaken annual leave a sick employee can claim?

    On the first point – the EAT held that the case of Larner had been misapplied and that an employee was NOT obliged to take annual leave if they were on sick leave.
    On the second point – the EAT held that accrued annual leave expires after 18 months from the end of the leave year that it accrued in. The EAT concluded by stating that wording to this effect, should be included into the Working Time Regulations.

    Conclusion

    Clearly, the Plumb case provides employees with some certainty, after a great deal of ambiguity over the past 4 years.

    In my opinion – it would be worth employers amending the sick pay and holiday leave policies so that they confirm that if any of their sick workers have accrued but untaken annual leave when they are on sick leave, then they are automatically entitled to carry this over but only for a period of 18 months.

    However – it is worth noting that this may not be the end of the matter as both parties have been granted leave to appeal to the Court of Appeal.

    The employment law department at Wildings advices both employees and employers on all aspects of employment law. If you have any queries regarding this or any other matters, then please do not hesitate to contact us on 0330 333 8797


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