Employers still in doubt over sick leave holiday pay

Employers are still unsure whether staff can accrue holiday pay while they are on sick leave.

A hearing on a long-running case took place in the House of Lords yesterday but the judgment will not emerge for at least six to eight weeks, a spokesperson said.

In Stringer v HMRC, former employees of Her Majesty's Revenue and Customs (HMRC) have brought claims against the department after requests for holiday and holiday pay were rejected due to long-term sick leave.

One employee had requested annual leave during a period of sickness absence, which HMRC refused. The others were dismissed following long-term sickness absence, and they claimed payment in lieu for outstanding holiday.

In January this year, the European Court of Justice (ECJ) held that staff do accrue paid holiday for their entire sick leave and must be allowed to take it on their return or be paid in lieu of it if their employment ends.

But as the ruling does not comply with the UK's existing Working Time Regulations, which requires employees to use all holiday within a year or lose it, the House of Lords will have to decide whether the decision by the ECJ applies in the UK.

The Court of Appeal had originally held that employees on sick leave did not accrue annual leave during the time they were not working.

Legal experts have predicted the House of Lords will clarify that the ECJ ruling will overrule the UK's Working Time Regulations.