UK: Time Off For Recovery

Originally published by The Times - 5 August 2003

Having a holiday marred by a bout of travel sickness is not an uncommon experience and such travails may be accepted as part of the exotic adventure. But recent case law raises the question of whether, under the Working Time Regulations 1998, a person can claim such sick days back from his or her holiday quota.

In 1999 a claim was brought by the AEEU, now part of the Amicus trade union, on behalf of a Mr Brown who, after a road traffic accident, was placed on sick pay. His last day of work was at the end of October 1998, the month that the regulations came into force. He applied to his employer for that year's holiday pay. He was given a mere five days.

Mr Brown took his claim to a tribunal and won. On appeal, Mr Justice Lindsay, the president the Employment Appeal Tribunal (EAT), confirmed that employees absent because of sickness are entitled to take, and be paid, holiday pay.

The entitlement to annual leave arises if the claimant has been a "worker" during the whole or part of a leave year. Nor, to satisfy the definition of a "worker", did the employee actively have to be engaged in work. So companies cannot avoid full holiday payment when an employee is off sick.

Then, what about the so-called "leisure syndrome", when a hard-pressed employee soldiers through the year, only be stricken by the illness the moment he or she goes off her a hard-earned break?

The question is pertinent to the legal profession, as medical evidence is increasingly linking such holiday malaise with high-stress jobs. It is unlikely that the regulations will extend to holidaymakers who fall sick. How could it be monitored: is sunburn sufficient to be regarded as sick? What about hangovers? Some bosses, though, do have policies allowing workers to discount sick days from their holidays. As our laws come more into line with Europe, the trend may grow. In the Netherlands, for instance, employees can take extra days to make up for days sick.

The regulations have had one other impact on holiday pay which affects seasonal and contract workers. For them a system of "rolled up holiday pay" was developed. Employees in the travel or construction industries, for instance, received an enhanced rate during periods of actual work; then, during holiday periods, were unpaid as their holiday payments had been "rolled up" into their normal remuneration.

This practice was examined by the Scottish Court of Session earlier this year. In a test case brought by Alexander Munro against his employer MPB Structures Limited, both the employment tribunal and the EAT held that pay at "a rolled up rate" was in contravention of the Working Time Regulations. Holiday must be paid as and when the holiday is taken. In the Court of Session, Lord President Lord Cullen affirmed the lower courts' decisions stating that it is essential both that payment should be made for annual leave but also that it should be made in association with the taking of that leave.

It is clear from these rulings that employers who try to get round the regulations will face determined opposition in the courts, where judges intend to apply both the spirit and the letter of the regulations. Any argument that an employee is not entitled to holiday pay when off sick will not succeed. Holiday pay clearly attaches to being a "worker" rather than "working." And rolled-up holiday pay, thought to square employees' rights with operational business demands, may no longer be effective - if English courts follow the Scottish ruling.

As the high temperatures continue, employees should be thankful of this premium placed on their time off. Yet they should exercise caution: the day is yet to dawn when that wasted day of precious holiday, the result of a nasty seasonal bug, over indulgence of sun or excess otherwise, can be claimed off as a sick leave.