When work time rules allow holiday on the sick

Recent tribunals have addressed the issue of worker’s right to paid holiday
during sick leave.  Sue Nickson reviews
the findings

The Working Time Regulations 1998 have thrown up many questions for
employers in relation to the right to annual leave. The most common question on
Hammonds Suddards Edge helpline for members of the CIPD has been ‘can a worker
can take paid leave during a period of long-term sickness?’.

Initial rulings

The first tribunal cases indicated the employee is not entitled to paid
leave in these circumstances. The London North Tribunal in one case pointed out
that the intention of the regulations is to provide the right to a minimum
amount of paid leave to safeguard health.

This is tied in with the definition of ‘working time’, which is described in
the regulations as any period a worker is at the disposal of the employer. When
absent due to sickness they fall outside this definition.

This reasoning could be criticised as the regulations provide only that
there need be a contract for the right to paid leave to exist. On the other
hand, it could be praised for taking into account the intention of the
regulations in providing a worker with the right to leave.

Leave notice

The issue remained unresolved, as subsequent tribunal decisions decided that
workers on long-term sick leave could give notice to their employer of their
intention to take annual leave and were entitled to be paid for that leave.

The matter came before the Employment Appeal Tribunal this month in three
conjoined appeals – Kigass Aero Com-ponents v Brown, Bold Trans-mission Parts v
Taree and Macredie v Thrapston Garage.

It was held that workers on long-term sick leave could claim holiday pay
even when they have been absent from work throughout the year in question.
However, to be paid for a period of holiday, a worker must give the employer
notice they intend to take leave.

Knock-on effects

The judgment recognised that this decision could have consequences beyond
the intended purpose of the regulations.

Employers may have concerns regarding the cost and the threat of potential
abuse of the rules by workers, and this may lead to employers being more
inclined to dismiss. It could even help the employer to justify a dismissal.
For example, in disability dis-crimination cases the employer has to show that
the decision to dismiss is justified and that to continue the contract would be
a burden. The cost of annual leave entitlement will therefore help the
employers claim for justification.

Another possible consequence is that employers may find workers who have not
attended the workplace in the past year, or the past 10 years, requesting
holidays. Indeed, one employer recently reported a request for paid leave from
a worker serving a prison sentence.

Whether in such cases the contract of employment will be found to have been
frustrated remains to be seen.

Key points

– Entitlement to paid annual leave arises if a claimant is or has been a
‘worker’ during the whole or part of a leave year.

– To be a ‘worker’ a person does not need to have done some work or attended
work.

– Unless a worker’s contract is terminated there is only an entitlement to
be paid in respect of annual leave taken.

– If a worker wishes to take annual leave under the regulations the
appropriate notice must be given to the employer.

Sue Nickson is partner and national head of employment law at law firm
Hammond Suddards Edge

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