Summary and implications

Sood Enterprises v Healy: Mr Healy had been on sick leave from June 2010 to July 2011 when he resigned due to ill health. He claimed payment in lieu of accrued, but untaken holiday during 2010 and 2011.

The EAT agreed with recent European and UK case law that an employee on long-term sick leave is allowed to automatically carry over the "basic allowance" of four weeks annual leave that is guaranteed under the European Directive, without the need to request it ( click here). However, it held that the "additional allowance" of 1.6 weeks annual leave granted under the Working Time Regulations cannot be carried over unless the parties have an agreement to do so. Such an agreement may be found in documents such as contracts of employment and company policies.

There was no such agreement between Mr Healy and his employer. He was therefore only entitled to carry over and claim payment for the "basic allowance" of four weeks per leave year, less any holiday taken prior to his period of sick leave.

What does this mean for employers?

Clients with employees on long-term sick leave should:

  • consider if they have agreed with employees on long-term sick leave that they can automatically carry over the "additional" 1.6 weeks' annual leave;
  • if no such agreement is in place, consider whether they would like to agree with employees that, if they are on long-term sick leave, they will be able to automatically carry over the "additional" 1.6 weeks' annual leave;
  • when calculating the number of carry over days or a payment in lieu of accrued but unused holiday in respect of an employee that is/has been on long-term sick leave, ensure that the correct number of days are carried over/paid for. The correct number/amount will depend on whether there is an agreement in place to carry over the "additional" 1.6 weeks' annual leave; and
  • consider whether specifically to inform employees of the limited right to carry over holiday whilst on long-term sick leave.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.