Judge spells out annual leave law

The law regarding when an employee is entitled to payment in lieu of untaken holiday due to long-term sickness absence has been clarified by appeal judges following a ruling. A challenge by NHS Leeds to an employment tribunal decision was thrown out by the Court of Appeal in London. The original decision said that a clerical officer who had been dismissed after a long-term period of sickness absence, was entitled to payment in lieu of paid annual leave that she had not taken or asked to be carried forward to the next year. Sitting alongside Lord Justice Tomlinson and Mr Justice Henderson at the Court of Appeal, Lord Justice Mummery ruled that there was no error of law in the decision made by the employment tribunal in favour of the female employee. He said: “Entitlement to paid annual leave and to payment in lieu on termination of employment matter a great deal to employers and workers alike. “Both sides need to know where they stand, preferably without having to go to the Court of Appeal, or all the way to Luxembourg, to find out how the law works. “The rule of law, in its practical application in the workplace, should ensure that, as far as possible, the legal rules are certain, clear and accessible by the people for whom the rules were made.” According to the judge, the court was told that not all employment tribunals “have been taking the same approach to paid annual leave rights on termination of employment after an extended period of absence on sick leave”. Following the NHS Leeds court case, it is hoped that the ruling “will produce more consistency”. Erica Humphrey, solicitor at IBB Solicitors commented:

“The interplay of holiday and sickness leave has thrown up some difficult interpretation issues for our domestic courts over the last couple of years. This has been particularly so in determining whether a worker is entitled to rollover holiday when they have been unable to take it due to sickness absence and whether that worker is required to specifically make such a request. Confusion stems from a contradiction between the wording of the European Working Time Directive which provides for the right to holiday and our own domestic legislation, the Working Time Regulations which implements the provisions of the Directive. The Directive is silent on the point about whether a worker is entitled to rollover holiday. However, the European courts have provided a number of judgments which positively interpret that silence as allowing for the rollover of holiday. Our own domestic Regulations explicitly require a worker to take their statutory holiday during the leave year (without rollover) unless an agreement exists to the contrary. Workers of UK institutions that are deemed to be an ’emanation of the state’ (as in this case) can directly rely on the Directive and the European authorities thereby allowing those workers to rollover their holiday, whereas private sector workers are unable to do so and their holiday is governed by the Regulations. This provides an unusual dichotomy between workers in the UK depending on the nature of who that individual works for. In this particular case, the courts were able to provide a judgment in line with the Directive as the employer was an emanation of the state. However, whilst it was unnecessary for them to pass judgment on the position for private sector workers, the judges commented that they considered that it was possible for all UK workers to take the benefit of the European position. The decision hints that all workers could be treated the same, irrespective of whether they are relying on the Regulations or the Directive. However, it should be noted that whilst the judges’ comments are likely to be persuasive, a precedent has not been set for private sector workers. It is also worth noting that this decision deals only with the 4 weeks’ statutory leave provided by the Directive and not the additional 1.6 weeks’ leave provided by the Regulations. The position remains unclear for all workers as to whether they are entitled to rollover the additional 1.6 weeks’ leave where they have been unable to take this due to sickness absence. “It may be that this continuing issue is put to bed in the future as the Government suggested in their 2011 ‘Modern Workplaces’ consultation that the Regulations should be amended to remove the contradiction which would allow for a blanket approach for all workers.”

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