In the much anticipated Court of Appeal decision in NHS Leeds v
Larner, it has been 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
Ms Larner was a clerical officer for NHS Leeds who went on paid
sick leave in January 2009 and did not return to work before she
was dismissed in April 2010. She did not request annual leave
during 2009/10 nor did she ask to carry forward her accrued leave.
After she was dismissed, she claimed that both the Working Time
Regulations ("WTR") and Article 7 of the EU Working Time
Directive (the "Directive") entitled her to payment in
lieu of untaken annual leave for the 2009/10 leave
The Tribunal and the EAT both found in favour of Ms Larner. In
particular, the EAT held that following the recent ECJ judgment in
Pereda, Ms Larner was entitled to carry over her leave entitlement
without having to make a formal request, and she was entitled to be
paid in lieu for the accrued but untaken holiday days. NHS
Leeds' appeal to the Court of Appeal was rejected following a
consideration of both the ECJ judgments in this area as well as the
Earlier this year the ECJ gave judgment [Dominguez –v-
Centre informatique due Centre Ouest Atlantique and another 
IRLR 321] clarifying that Article 7 has direct effect against an
emanation of the state, which the parties in the Larner case agreed
included Leeds NHS. None of the ECJ decisions require a
worker to make a request to take paid annual leave or carry it
forward to another leave period. Further, in respect of the
WTR the Court of Appeal held that regulation 15 (which relates to
the requirement for a worker to give notice to take leave) does not
apply to a worker on sick leave who is prevented by their sickness
from taking paid annual leave during that period of sick
leave. The Court stated that it would be possible, if
necessary, to construe the WTR to conform with the Directive,
meaning that all employees (not just those employed by an emanation
of the state) should be subject to the same principles.
The Court of Appeal referred only briefly to the case of Fraser v
South West London St George's Mental Health Trust 
IRLR 100 in which the EAT held that a sick employee was not
entitled to carry over leave entitlement when a request to do so
had not been submitted to their employer. The Court of Appeal
held that the facts of Larner and Fraser could be distinguished in
that in Fraser the employee had returned to work for a period of
time and therefore had the opportunity to take holiday before her
dismissal. However, it is not clear that the Court of Appeal
determined that Fraser was wrongly decided.
Unfortunately, the Court of Appeal declined to provide general
guidelines on issues relating to holiday and sick leave on the
basis that ECJ authority in this area is still developing.
However, it is important that employers keep their sick leave and
holiday leave policies under review, to ensure that they are
compliant with the current state of the law in this area.
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