Sickness and Holiday Leave

In the case of Shah v First West Yorkshire Limited an Employment Tribunal (ET) has held that an employee who was signed off sick during a pre-arranged holiday period should be allowed to carry over that period of leave to the following holiday year, when it could not have been taken in the relevant leave year. In doing so the ET added new words to Regulation 13(9) of the Working Time Regulations 1998 (WTR) to bring it into line with a recent European Court of Justice decision. 

The EU Working Time Directive lays down minimum health and safety requirements for the organisation of working time. The purpose of the entitlement to paid annual leave is to enable a worker to rest and to enjoy a period of relaxation and leisure. The purpose of the entitlement to sick leave, however, is to enable a worker to recover from illness.

In Pereda v Madrid Movilidad SA, the European Court of Justice ruled that a Spanish worker who suffered an accident at work, with the result that he was on sick leave for most of the annual leave period allocated to him, had the right, on request, to reschedule his holiday, even if this meant carrying it forward to the following leave year.

This follows the earlier case of Stringer and others v HM Revenue and Customs, which established that the right to take annual leave is not extinguished if an employee is on long-term sick leave. It is up to the national courts to decide whether paid leave can be taken during a period of sickness or whether it should be carried over to another year.

Both decisions raised questions regarding the operation of the WTR, which implement the EU Directive into UK law. Under the WTR, prior to Shah, if a worker became ill just before taking annual leave or during the holiday itself, s/he did not have any automatic right to convert that holiday to sick leave. While other tribunals are not obliged to follow the decision in Shah it seems likely that they will. The Department for Business, Innovation and Skills has previously said that it is examining the terms of the judgment in Pereda and will issue further guidance in due course. The finding in Shah makes the need for this new guidance all the more imperative. 

If you require advice on the practical implications of these developments please do not hesitate to contact us.