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Holiday carry over and sickness

December 9th, 2015

I have been dealing with a couple of recent cases of dismissal on the grounds of capability, following an extended period of ill health and being absent from the workplace. After following a rigorous process of obtaining an occupational health report, meaningful consultation with the individual to establish how they are feeling and coming to the conclusion, with their acceptance that they are not well enough to return to work I have stumbled on the thorny issue of holiday pay!

The working time directive requires a worker to take annual leave within the leave year in respect of which it is due, this may not be replaced by a payment in lieu unless the employment is terminated.

There is a great deal of historic case law, not for the fainthearted I can tell you! And thanks to Luke Welsh of Law in work for highlighting recent case law from July 2015 Plumb v Duncan Print Group Ltd, which brings some clarity, in that the EAT concluded [at para 45]:

Leave to which a worker is entitled under this regulation may be taken in instalments but, – (a) it may only be taken in the leave year in respect of which it is due, save that it may be taken within 18 months of the end of that year where the worker was unable or unwilling to take it because he was on sick leave and, as a consequence did not exercise his right to annual leave.

So employees will be paid their statutory holiday pay on termination of employment up to 18 months after the end of the leave year in which it was due.

Employees and Employers need to be aware that unless they exercise their right to take paid annual leave in the year within which it is due they face losing it subject to contractual or policy clauses. We provide policies and procedures that take the hassle out of HR.

Should you require practical advice on any employment related matter get in touch, we can help take the pain away letting you get on with your real job!

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