Employment Appeal Tribunal confirms limit on carry-over of holiday not used due to sickness absence
This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.
In Plumb v Duncan Print Group Limited the EAT has held that the Working Time Regulations 1998 (“WTR”) should be read to place a limit on a worker’s ability to take holiday which they were unable to take in the year in which it accrued due to sickness. The EAT found that such holiday must be taken within 18 months of the end of the leave year in which it accrued or it will lapse.
Back in 2009, the European court and the then House of Lords found in the case of Stringer v HMRC that workers who were unable to take holiday in the year it accrued due to sickness should be allowed to carry it forward to subsequent holiday years. Since then, employers have been uncertain as to how long they must let workers carry over holiday for – this has led to concerns that workers on long-term sick leave may accrue and have the right to take or be paid in lieu of a number of years’ worth of holiday.
European case law had subsequently confirmed that a limit under domestic law of 15 months from the end of the relevant leave year was acceptable. However, prior to the EAT’s judgment in Plumb, it was unclear how this would be applied to the WTR, which on the face of it do not allow any carry-over.
In its judgment, the EAT also clarified that a worker on sick leave is not required to demonstrate that they are actually physically unable to take annual leave by reason of their sickness, referring to previous case law that confirmed that the worker must be “unable or unwilling” to take annual leave because they were on sick leave.
Practical advice
- This case provides some welcome clarity for employers, particularly in dealing with employees on long term sickness absence who may otherwise have had claims for payment in lieu of holiday on termination dating back a number of years, or have returned to work and sought to take a significant amount of accrued but untaken holiday.
- The decision could yet be appealed, however the principles applied by the EAT are in line with the European case law.
