HR Expert: Managing sickness absence
An employee of our client has been off sick for some time, and this has raised some interesting questions around holiday entitlement. Firstly, they have a week’s annual leave booked soon, but this time will also be covered by their fit note. They want to re-arrange this holiday, but does my client have to let them? Secondly, if they do have to allow this, it will probably mean the leave will have to be carried over into the next year, as their holiday year is April – March. Again, do they have to allow this?

The courts have interpreted the law in relation to sickness and holidays in a way that could catch unprepared employers out. As such, there are a number of points that your client should be aware of.

European case law, followed in our domestic courts, is relevant. In Pereda v Madrid Movilidad SA [2009], a similar situation arose. The court said that forcing the worker to take pre-booked holiday during sickness would mean the purpose of annual leave (to take a break from work, relax, and enjoy leisure time) could not be fulfilled and therefore it could not count as holiday (separately, employees on long-term sick can take holiday if they so wish). Therefore, the employer had to let the employee re-arrange the leave. Due to this being an interpretation of EU law, whilst it is something UK employers have to follow as domestic courts have adopted this, it only applies to the first four weeks of annual leave (this is the leave required by the EU Working Time Directive).

Of course, as your client’s employee can re-arrange the leave, you are right the question arises – can they carry it over from one leave year to the next? The answer, once again, is yes. In KHS AG v Schulte [2011], the European court held that where a worker cannot take their annual leave, they should be able to carry it into the next leave year. However, this is not indefinite. As the purpose of annual leave is to allow the worker to rest, and provide time for relaxation and leisure, there must be a cut off where its positive benefits are lost and the whole purpose of leave cannot be met.

The Court of Appeal has helpfully confirmed how long this carry-over period should be in NHS Leeds v Larner [2012] where it said that we should read into regulation 13(9) of the Working Time Regulations 1998 (WTR) the following (italicised wording added in by the courts):

“Leave to which a worker is entitled under this regulation may be taken in instalments but –
(a) it may only be taken in the leave year in respect of which it is due, save that it may be taken within 18 months of the end of that year where the worker was unable or unwilling to take it because he was on sick leave and as a consequence did not exercise his right to annual leave“.

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