Sickness Absence and Annual Leave

As frequent as British rowing medals at Eton Dorney, so cases seem to come out regarding sickness absence and annual leave. The most recent is NHS Leeds v Larner in which the Court of Appeal has held that a worker who was unable to take four weeks’ annual leave due to sickness did not have to make a request to carry the untaken leave over into the next leave year in order to receive a payment in lieu of it on termination of employment.

In considering whether the Working Time Regulations can be construed to give effect to the European directive from which the Regulations are derived, the court stated that this would be possible. First, in relation to the carrying forward of unused annual leave, Regulation 13(9) would be construed to read: ‘Leave… may only be taken in the leave year in respect of which it is due, save 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.’ In relation to payment on termination of employment, Regulation 14 would be interpreted to include: ‘(5) Where a worker’s employment is terminated and on the termination date he remains entitled to leave in respect of any previous leave year which carried over under Regulation 13(9)(a) because of sick leave, the employer shall make him a payment in lieu equal to the sum due under Regulation 16 for the period of untaken leave.’

As a result of this finding, employers need to give thought to how and when holiday entitlements for long term absent employees is managed and paid. It will become increasingly well known by employees that this is now their ‘right’ and so employers will need to be proactive in addressing this issue.

For more information, help or advice please contact Tim Davies on 0191 211 7927 or email [email protected].