Friday, July 10, 2015

Are You Off Sick, On Holiday Or Both?

The Employment Appeal Tribunal has handed down a Judgment  that helpfully clarifies the law around entitlement to holiday pay whilst off sick.

Mr Plumb was a printer. As a result of an accident in April 2010 he was off work continuously until February 2014 at which point his employment was terminated.  

He did not take any paid holiday during the 2010,2011 or 2012 holiday years. He tried to take paid holiday in August 2013 but his employer refused to allow him to do so.

Following termination of his employment Mr Plumb brought a Claim for his holiday pay for 2010-2012. The company had agreed to pay him for the 2013/14 holiday year.

The Employment Tribunal turned down his Claim on the basis that he had not shown that he was unable to take the holiday because of his sickness and had not therefore satisfied the Tribunal that he ought to be able to carry over the unused holiday.

Mr Plumb appealed to the Employment Appeal Tribunal.

The EAT referred to the previous case law on the topic and in particular analysed the reasoning behind the applicable EU Directive and the European case law. This drew the distinction between sick leave, which is for the purpose of recovering from a medical illness and annual leave, which was to enable workers to have rest in order to ensure health and safety.

It envisages that employees should not be forced to take holiday whilst they are off sick and should be able to take it, for its distinct purpose, in a subsequent year if necessary.

The EAT concluded that the Employment Judge's decision was wrong. Where an employee had the option of taking annual leave while off sick, he or she was not obliged to do so but had the choice. If they chose not to do so, then the untaken annual leave could be carried over beyond the end of the holiday year in question.

Mr Plumb was not therefore required to prove that his sickness absence meant that he was "unable" to take his holiday.

So far so good for Mr Plumb. However, the EAT went on to note that the case law was concerned about the possibility that an employee could carry forward annual leave entitlement over many years. It was therefore lawful, and appropriate, to impose a limit on how far leave could be carried forward.

The EAT took the view the the period for which holiday entitlement could be carried forward was 18 months from the end of the holiday year in which it was accrued.

Mr Plumb was therefore entitled to his accrued holiday pay for the February 2012 to January 2013 holiday year but not for the period prior to February 2012.

It remains to be seen whether this topic will be considered further by the Court of Appeal but the clarification is welcome and the latter part of the decision does at least give some comfort to employers after recent decisions that have potentially expanded the scope of their obligations to pay holiday pay on overtime and commission going back in some cases many years.