Recent European and UK case law has established that employees on long-term sickness absence can carry over the minimum four weeks' paid annual leave required by the EU Working Time Directive without needing to request it. It has been less clear whether employees who are absent due to sickness are also entitled to carry over the additional 1.6 weeks' annual leave granted under the UK Working Time Regulations. In Sood Enterprises Ltd v Healy, the EAT has now clarified that this additional leave does not need to be carried over when an employee has been on sick leave unless there is a specific agreement between the parties to do so.
Mr Healy was on sick leave from July 2010 to June 2011 when he resigned due to his continuing ill health. He brought proceedings claiming for payment in lieu of accrued but untaken holiday during the 2010 and 2011 holiday years. The Tribunal held that Mr Healy was entitled to be paid in respect of the 1.6 weeks' additional leave as well as the four weeks' basic leave. Overturning this decision, the EAT confirmed that, since there was no agreement stating otherwise, Mr Healy was only entitled to carry over and be paid for the basic four week entitlement, and not the additional 1.6 weeks' leave.
Although we are still awaiting confirmation, it is widely expected that the Government will follow this decision when it amends the Working Time Regulations to clarify the circumstances in which sick employees can carry over untaken holiday entitlement. In the meantime, employers are advised to consider their policy on sickness absence and carry-over of holiday, and to ensure that this is expressed clearly in employment contracts and handbooks.
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