Greater Holiday Rights For Employees On Sick Leave

You work hard all year looking forward to three weeks holiday over Christmas, only to fall ill on the second day in - bedridden for the entire period. And, of course, you conveniently recover the day before you are due to start back at work!

Three weeks of hard-earned holiday wasted. Feels pretty unfair doesn’t it ?

There wasn't a lot you could do in this situation - until a series of recent rulings which laid down that, under certain circumstances, employees should be allowed to re-take holiday disrupted by sick leave.

The rulings - two decisions from the European Court of Justice and one from the UK Employment Tribunal - mean employees with pre-arranged holiday that coincides with a period of sick leave now have greater holiday rights.

Employees on sick leave, no matter how long for, cannot lose their entitlement to holiday, which will accrue even if they were off for the entire holiday year. They must either get paid for statutory holiday allowance not taken if they are dismissed, or allowed to take their holiday days at a later time - even if this is outside the year when the holiday was accrued.

The most recent case of Shah v FWYL put this to the test in the UK courts.

Shah v FWYL

This important case concerning the application of the changes in EU law to the UK, involved a Mr Shah who had booked four weeks holiday in February / March 2009 (his holiday year ran from 1 April to 31 March).

In January 2009 Mr Shah broke his ankle and was absent from work until April 2009. His sickness absence, therefore, overlapped with his booked holiday. During this absence he received contractual sick pay and was also paid holiday pay for his period of annual leave which was calculated at a higher rate than his usual rate of pay.

On returning to work (in a new holiday year) Mr Shah asked if he could take his holiday at a later time, but his employer said that his holiday could not be reclaimed as it related to a previous holiday year and had therefore been 'lost'.

Mr Shah submitted a claim to the Employment Tribunal under the Working Time Regulations (WTR) - a set of guidelines regulating the rights and obligations arising from time at work. The Tribunal ruled that Mr Shah’s employer had not permitted Mr Shah to exercise his statutory rights under the WTR. They felt this was inconsistent with the health and safety objective of the WTR - that employees should be able to take paid periods of holiday throughout the year, and that those who had fallen ill should not be penalised.

What this means for employees:

This case provides us with a good idea of how similar claims would be viewed by the Courts.

Employees should be aware of their rights to holiday leave, even if they are on long-term sick leave or fall ill during a pre-booked holiday, and in particular:

  • Consider reporting any sickness when it happens, even when technically on leave, to avoid any disciplinary action due to a breach of the employer’s sickness absence procedure. However, there may be practical difficulties in reporting sickness or obtaining medical evidence whilst abroad which an employer should bear in mind.
  • Any holiday pay received during sick leave may need to be repaid (as in the case of Shah).
  • Consider whether it’s financially worthwhile to ask to re-take holiday where there is no entitlement to contractual sick pay, since the employee may be left instead with statutory sick pay which is of much lower value.
  • The employer can refuse to pay contractual sick pay unless the employee is unable to do his actual job. For example an employee saying they are unfit to enjoy a skiing holiday because of a sprained ankle may not have done enough to be entitled to sick pay!
  • Always bear in mind there are time limits for bringing an Employment Tribunal Claim. These are three months less one day from the latest date the leave should have been allowed or paid for (or in relation to unpaid holiday pay from previous holiday years - within three months from the last deduction).

As every case will be different, it is recommended that you seek professional advice before pursuing any claims against your employer.

Rachel Lester is a solicitor in the employment team at Russell Jones & Walker

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