Holiday and Sick Leave – Court of Appeal Decision

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We have been waiting for the English Court of Appeal decision in NHS Leeds v Larner which held that a worker who was unable to take four weeks’ annual holiday as she was sick for the entire holiday year did not have to make a specific request to her employer to carry the untaken leave over into the next holidays year in order to receive a payment in lieu of it on termination of employment. Mrs Larner worked for the NHS in Leeds and their holiday year ran from 1st April to 31st March. She went off sick on 9th January 2009 and at that time had not booked any holiday and did not make any requests to take any holiday whilst she was on sick leave. NHS Leeds decided to terminate her employment on 6th April, 2010. Mrs Larner claimed her unpaid holiday pay but Leeds NHS argued that as she had not made any requests to them to take her holiday then the entitlement to annual leave was lost when the holiday year ended on 31st March. The Employment Tribunal and the Employment Appeal Tribunal found in her favour and stated that she was entitled to be paid in lieu of the annual leave that she had had no opportunity to take even though she never specifically requested any holiday. NHS Leeds appealed and the Court of Appeal stated that the issue of holiday pay whilst an employee was on long-term sick leave was an area that needed clarification with employers and workers needing to know where they stand and the rules should be “certain, clear and accessible”. Not all employment tribunals have been adopting the same approach to this issue on termination of employment following a period of long-term sick leave. Several European cases were considered by the Court of Appeal and submissions from both parties in this case suggested this was an opportunity for guidance to be provided to employment tribunals and their users on this issue. The Court of Appeal responded that it was “nervous about offering judicial guidance” due to the succession of European Court of Justice (ECJ) references on holiday pay during long-term sick leave as it considered it could be superseded and become outdated very quickly. The Court of Appeal said that after hearing the arguments in this case and reviewing current case law, it agreed with Mrs Larner that the requirement to make a request to take holiday has no application where the worker is absent on sick leave and is therefore prevented from taking annual leave. If the worker has the right under the Working Time Directive to take holiday entitlement at another time then it would be inconsistent if the worker was required to request to take leave at another time. Mrs Larner had neither recovered from her illness nor returned from sick leave and she therefore had no opportunity to take her leave at another time. So we will still have to wait for the ECJ to give further guidance on this issue but employers would be well advised to tread carefully in cases like this until we have further clarification.

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