Holiday accrual for sick employees

Holiday accrual for sick employees


In a case published last week, the Employment Appeals Tribunal (EAT) has provided further clarification on the accrual of annual holidays for sickness absent employees.

In Sood Enterprises Limited v Healy, the employee was off work for a period which spanned two annual leave years. During that time, he did not take any holidays because he was not at work – so there was nothing to be taking a holiday from. He then resigned, and he claimed payment for untaken annual holiday under the UK’s Working Time Regulations. His employer resisted the claim and it was heard by an Employment Tribunal, then on appeal by the EAT.

This case (like many working time cases) turned on the technicalities of the UK’s Working Time Regulations and the EU directive they seek to implement, the Working Time Directive. As such, the case may not align with what many might consider to be a common-sense position.

Of importance in this case is that the directive provides for a minimum period of annual holiday of 20 days (4 weeks), whereas the UK regulations provide for a minimum period of annual holiday of 28 days (5.6 weeks) – with the extra 8 days (1.6 weeks) being a UK entitlement that goes above and beyond the EU required minimum.

In this case the EAT decided that an employee off work due to sickness absence, who cannot take his or her holiday as a result, is automatically entitled to accrue and carry over the EU minimum of 20 days’ (4 weeks) holiday each year (whether he or she requests it to be carried over or not). However, the EAT also said that the same employee will only be able to accrue and carry over the extra 8 days (1.6 weeks) provided for under the UK regulations if he or she has entered into a prior agreement to do so with his or her employer, and even then only from one leave year to the immediate next leave year.

In a practical sense, for many UK workers the extra 8 days holiday under the UK regulations are often just the bank (public) holidays – these would be the days that are not able to be carried over, with the ‘normal’ 4-week break being the period that is able to be carried over instead.

On a final note, this is a decision of the EAT and – given the tumultuous nature of litigation over this issue - it may well be that the matter is further appealed before it is finally resolved.