Sickness Absence and Holiday Pay

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In the recent EAT case of Sood Enterprises v Healy it was held that additional annual leave cannot be carried forward into the next leave year, unless there is an agreement in place between the parties.

One of the difficult questions concerning the relationship between statutory holiday rights and long-term sick leave is the apparent incompatibility between regulation 13(9) of the Working Time Regulations 1998 and the Directive regarding carry-over of holiday for workers who have been unable to take the holiday due to sickness. In 2012, the Court of Appeal took the view in the case of NHS Leeds v Larner that it was possible to interpret the Working Time Regulations 1998 in line with the Directive so as to allow carry over of holiday of up to 4 weeks (i.e. 20 days) where a worker was on long-term sick leave. However, the court declined to decide whether the Directive requires the additional 1.6 weeks (i.e. 8 days) under regulation 13A to be treated in the same way as the four weeks’ leave under regulation 13.

In Sood Enterprises v Healy, the EAT have confirmed that the Working Time Directive does not require carry-over of the additional 1.6 weeks’ leave under regulation 13A of the Working Time Regulations 1998 where a worker is prevented from taking holiday due to long-term sickness absence.

So at the present time, if, for example, a worker is on long-term sick leave for the whole of 2013 and their holiday entitlement is the statutory minimum 28 days, then 20 of those days automatically carry forward into the next leave year (i.e. into 2014) and the remaining 8 days do not, unless there is an agreement between the employer and the worker for the 8 days to be carried forward. That is the position for the time being and will remain so unless and until a higher court rules otherwise or it is changed through legislation.

Written by
Edward Aston
6th August 2013