An employee’s entitlement to holiday, and the pay he or she receives while taking holiday, has been a hot topic in the courts over the past few years.

In the case of Plumb v Duncan Print Group Ltd, the Employment Appeal Tribunal (“EAT”) has returned to the topic of an employee’s entitlement to holiday while on sick leave.

In 2009, the European Court of Justice (“ECJ”) in the cases of Stringer and Others v HM Revenue & Customs and Pereda v Madrid Movilidad established the following principles:

  • Workers who are off work on sick leave continue to accrue annual leave
  • Workers can take holiday during sick leave, however if they are unable or do not wish to do so, they can take it at a different time, even if this means carrying it over to the next holiday year

These decisions were all made under the EC Working Time Directive (“Directive”). However, they conflict with regulation 13(9) of the Working Time Regulations 1998 (“WTR”) which implements the Directive in the UK. Specifically, this provides that statutory annual leave must be taken in the same year in which it is accrued and cannot be carried over into the following leave year.

Continue Reading Holiday entitlement during sick leave – Where are we now?

Holiday pay is often a tricky issue for employers and one which seems to be changing constantly. In the light of several new cases discussing holiday pay which have been reported over the summer and in the last couple of weeks, we take the opportunity to round up the legal developments, and set out five things employers should know before deciding how much holiday pay an employee may be entitled to on termination of their employment.Continue Reading Holiday pay – five things you should know when calculating holiday pay

The House of Lords, in the case of HM Revenue and Customs v Stringer and others has overturned the decision of the Court of Appeal in that case, ruling that claims for unpaid statutory holiday pay and accrued statutory holiday pay on termination under the Working Time Regulations 1998 (“WTRegs”) can be made as unlawful deduction from wages under the Employment Rights Act 1996 (“ERA”), as well as under the WTRegs. This will mean that workers can take advantage of the more favourable time limits which apply under the ERA, which could potentially allow them to claim unpaid holiday pay on termination of their employment going back several years, provided they bring their holiday pay claim within three months of their employer’s most recent failure to pay them holiday pay. This decision will not be welcomed by employers as it will increase the cost of both continuing to employ workers on long term sick leave, and also on termination of their employment. It also leaves unresolved a number of practical problems arising from the decision of the European Court of Justice (ECJ) earlier this year on this issue (see our blog for details of the ECJ decision). Continue Reading House of Lords paves way for back-dated holiday pay claims

The European Court of Justice has ruled that workers on long term sick leave will not lose their right to holiday pay where they have been unable to take the holiday by virtue of being on sick leave. This decision is very unwelcome to employers as it will increase the cost of both continuing to employ workers on long term sick leave, and also on termination of their employment. Read on to see what we think this means for employers in practice.

Gerhard Schultz-Hoff (C-350/06) v Deutsche Rentenversicherung Bund, and Mrs C. Stringer and Others (C-520/06) v Her Majesty’s Revenue and CustomsContinue Reading European Court rules on holiday pay during sick leave