Holiday Accruals for Employees Absent on Sick Leave

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We often find business owners are incredulous that an employee can be absent from work on long-term sick leave yet still continue to accrue their entire holiday entitlement during that time. In the recent case, NHS Leeds v Larner (2012), the Court of Appeal held that a worker was entitled to carry forward untaken paid annual leave even though absent on long-term sick leave and that there was no legal requirement for her to have submitted a request to take the holiday. On termination of employment, she would be entitled to payment in lieu of all holiday accrued but not taken. Despite the fact that the Working Time Regulations 1998 provide that annual leave must be taken “in the leave year in respect of which it is due”, where sickness prevents the worker from taking their holiday in the year in which it was due, they will be permitted to carry the leave forward into the next holiday year. In another case, Asociacion Nacional de Grandes Empresas de Distribucion (Anged) v Federacion de Asociaciones Sindicales (Fasga) and others (2012), the European Court of Justice held that the Working Time Directive prevents national measures that prevent workers who become sick during paid holiday to take that holiday at another time. It makes no difference whether the illness occurred before the scheduled holiday was due to commence or occurs during the holiday period. The period of postponed holiday must be the same as the period of annual leave lost due to sickness and the worker will be free to carry the holiday entitlement forward into the next holiday year.

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