UK: The Employment Appeal Tribunal (EAT) has provided important clarification on the annual leave entitlement under the Working Time Regulations 1998 (WTR) of workers (including employees) who are off work on long-term sick leave.
In the case of Fraser v Southwest London St George’s Mental Health Trust, the EAT has decided that:
- a worker on long-term sick leave must request annual leave in line with the requirements of the WTR in order to be entitled to be paid for it;
- a worker is entitled to be paid in lieu of accrued but untaken holiday when employment terminates, but only in respect of leave accrued during the leave year in which employment terminates. Accrued but untaken annual leave from previous leave years does not carry forward for the purposes of the payment in lieu entitlement where no request to take such leave was made by the worker; and
- there is no duty on the employer to make a worker aware that the WTR rules operate in this way.
The decision provides welcome clarification to employers facing holiday-pay claims from workers on long-term sick leave on how to calculate annual leave. It is now clear that such workers are not entitled to be paid unless they requested annual leave during the relevant leave year. The EAT commented that it may seem artificial for an employee who is not at work to have to give notice in this way, but in the EAT’s view that “merely reflects the artificiality of a period of long term sickness counting as holiday at all”.