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Employees unable to take statutory holiday because of sickness
absence are entitled to carry it forward regardless of whether this
has been specifically requested.
Overview
The Court of Appeal has handed down its Judgment in Larner v
NHS Leeds. As a result, employees who are unable to take their
statutory annual leave due to sickness must now be allowed to take
such leave at another time or alternatively carry the leave forward
to the next holiday year without having to make such request in
advance. Payment in lieu on termination for untaken leave must also
now include such carried forward untaken leave. This right applies
equally to private and public sector employees.
Facts
The Appellant, NHS Leeds, employed the Respondent, Mrs Larner,
as a clerical officer from 2000-2010. Mrs Larner was absent on sick
leave for the whole of 2009/10. She did not take any of her paid
statutory annual leave during this time and did not submit a
request for it to be carried forward to 2010/11. Mrs Larner's
employment was terminated in April 2010, on grounds of
incompatibility due to her continuing ill health, and her notice
included the standard wording that "a payment would be made in
respect of any outstanding leave". NHS Leeds refused to pay
her for the untaken leave for the year 2009/10.
Mrs Larner's claim is based on her entitlement to paid
annual leave under Article 7 of the Working Time Directive which
was, implemented by the UK Working Time Regulations 1998 (WTR).
NHS Leeds argued that there is a legal requirement for a person
on sick leave to make a request to their employer if they wish to
carry forward their entitlement to annual leave from one year to
another. If this request isn't made then the option is
lost.
Decision
All three judges upheld the Employment Tribunal (ET) and
Employment Appeal Tribunal's (EAT) findings that Mrs Larner was
entitled to annual paid leave accrued during her sick leave and
that she was entitled to carry this forward to the next leave year
without making a prior request to do so. Further she was entitled
on termination of her employment to be paid in lieu for the annual
leave she had been prevented from taking.
This decision has clarified the right of 'carry over'
and put an end to the inconsistency between the two EAT decisions
of Larner and Fraser v Southwest London St George's Mental
Health Trust (Fraser), where it was decided that an employee
had to ask for leave in order for annual leave rights to be
triggered. Fraser has now been distinguished on its facts that,
unlike in Larner, Mrs Fraser had the opportunity to take the unused
leave on her return to work. Consequently it is considered that Mrs
Fraser was required to provide notice in order to take annual
leave.
Comment
Clarity on the issue of notice requirements and payment in lieu
on termination is a significant development for both employers and
employees. The decision will lead to additional expense for
employers who have previously followed the Fraser decision in
dealing with carrying forward holiday that isn't taken due to
sickness.
The Court of Appeal did not decide whether the carry-forward
rights apply just to the 4 week entitlement under the Directive or
whether the rights apply to all of the 5.6 week entitlement under
the WTR. They also did not address the question of whether time
limits can be imposed before carried-forward leave is lost. These
are areas likely to be covered in the Government's forthcoming
'Modern Workplaces' reform.
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.
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