An Employment Tribunal has held that an employee, whose pre-arranged holiday coincided with a period of sick leave where there was insufficient time on the employee’s return for the employee to take the leave in the current holiday year, should be entitled to carry over that leave entitlement to the following holiday year.

The Tribunal interpreted the Working Time Regulations 1998 (WTR) which says that any holiday entitlement must be taken in the leave year in respect of which it is due in line with the recent European Court of Justice decision in Pereda v Madrid Movilidad SA by reading into the WTR words allowing holiday to be carried over to a subsequent holiday year if it coincided with sickness absence.

The case in question was Shah v First West Yorkshire Limited. Mr Shah had booked 4 weeks holiday between 22 February and 21 March 2009. As he worked three days a week this accounted for 12 days of his annual holiday entitlement. The relevant holiday year ran from 1 April to 31 March.

In January 2009 Mr Shah broke his ankle and was absent from work between 15 January to 18 April 2009. On 4 April he wrote to his employer asking to “reclaim” his 12 days holiday, to which the employer responded that the holiday could not be reclaimed as it related to a previous year and had therefore been lost. Mr Shah subsequently submitted a claim to the Employment Tribunal for the “lost” holidays and sought those holidays to be carried over in the following holiday year.

The Decision
The Tribunal upheld Mr Shah’s claim and declared that by refusing his request to carry accrued holiday in the following year, when he was prevented from taking it in the current year due to illness, First West Yorkshire Limited had failed to allow him to exercise his rights under the WTR.

The Tribunal held:
 

• In light of Pereda and to comply with the E C Directive, UK national law must permit an employee who falls sick during a period of annual leave to take that annual leave subsequently, within the current holiday year, or if time does not permit, within the following leave year.

• It is the primary purpose of provisions of the WTR not allowing holiday leave to be carried from one year to the next is to give workers frequent paid periods of holiday throughout the year and prevent them from storing it up holidays for more than a year and then either cashing them in on termination or taking them as lengthy periods of extended leave.
   
• It is entirely consistent with that purpose for workers who have fallen ill and become unable to take their leave, to be allowed to take their leave in the following year. The purpose of holiday leaves being rest and relaxation whereas the purpose of sick leave is for recuperation.
   

 

• It was entirely consistent with “the underlying thrust” of the WTR to add words to the WTR to cover “the limited and special situation” highlighted in Pereda. This had the effect of allowing Mr Shah to take the holidays that ill health prevented him from taking in the following leave year.

• The words the Tribunal added to the WRT provision which stipulates holidays may only be taken in the leave year of which it is due is as follows:

“Save where a worker has been prevented by illness from taking a period of holiday leave and returns from sick leave, covering that period of holiday leave, with insufficient time to take that holiday leave within the relevant leave year: in which case, they must be given the opportunity of taking that holiday leave in the following leave year.”

Implications of the Decision
This is the first UK case which has given effect to Pereda and considering the similarity of facts it would have been surprising if a Tribunal had not considered itself to be bound to follow that decision. Although this decision is not binding on other Tribunals (as an Employment Tribunal cannot bind other Employment Tribunals or higher courts) it is a clear indication that Judges are prepared to give direct effect to E C Working Time Directive case of Pereda.

Therefore employers should be aware that where an employee is off sick during a period of scheduled holiday leave the employee should be allowed to postpone this holiday leave to when they return during the current holiday year or if time does not permit, to carry that leave over to the next holiday year.

Further Information
For further information on the issues raised in this ezine, please contact Barry Nichol, Associate or your usual contact within the Employment Team.

This bulletin is for general information only and does not constitute legal, investment or other professional advice. Please contact us should you require advice on any particular legal issue. Anderson Strathern LLP accepts no responsibility for any loss that may arise if reliance is placed on any information or opinions expressed in this bulletin.