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JULY 2010

As the summer holiday season gets underway, it is a convenient time to remind our readers of some odd quirks that are present in the law relating to holidays, particularly the relationship between holidays and sickness absence.

Employers will be aware that by law, employees are entitled to a minimum of 5.6 working weeks paid holiday per leave year, subject to a maximum of 28 working days (inclusive of public and bank holidays if appropriate).  Employees may enjoy more extensive rights to holiday than this by virtue of their contract of employment, but cannot be required to take less than the statutory minimum holiday entitlement.

In general, the first 4 weeks of holiday in any leave year cannot be carried over to the next leave year, if unused.  With regard to the remaining 1.6 weeks, this may be carried over if a “relevant agreement” such as the employee’s contract, allows it.  Therefore it is usually the case that if an employee does not use their full holiday entitlement during a leave year, they will forfeit the unused portion. By statute, employees are only paid in lieu of accrued but untaken holiday entitlement, when their employment terminates.

However, recent domestic and European case law has caused this default holiday entitlement to be called into question in circumstances where an employee is on long term sick leave or experiences illness during a period previously authorised as holiday.

The exact law on this area is yet to be fully clarified but note where sickness and holidays collide that:

1. if an employee is on long term sick leave, he may elect to take statutory holiday during each relevant leave year whilst off sick and be paid holiday pay as opposed to sick pay.
2. it has been suggested in EU case law, that an employee on long term sick leave may have the right to carry over untaken statutory holiday from one leave year to the next.  This is currently inconsistent with domestic law but nevertheless presents a risk to UK employers.
3. an employee who does not receive his full amount of statutory holiday pay over a prolonged and continuing period, may on termination have a valid legal claim to recover unpaid holiday pay, even if he did not request to take holiday over the period in question, and therefore forfeited the relevant holiday entitlement.
4. it has been suggested in EU case law, that if an employees becomes ill during a period of authorised holiday, he should be entitled to designate the period of illness as sick leave and re-schedule the affected holiday time, even if that means carrying it over to the next leave year.  This is inconsistent with domestic law but still presents a risk.

Whilst in practical terms, any conflict arising between holiday rights and sickness absence would hopefully be resolved between employer and employee pragmatically and amicably, employers should nevertheless be aware that if any such conflict is not resolved, the prevailing law is unclear and the current trends in case law favour the employee.

Helen Wyatt
Partner

If you would like any further information about the issues raised in this newsletter, or any other aspect of employment law, please contact Helen Wyatt (hwyatt@gdlaw.co.uk) or any other member of Goodman Derrick LLP's employment team on 0207 404 0606.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice.