Background

Readers of these updates will be aware of the ongoing changes in case law following the House of Lords decision in Stringer. Following that case and other European cases it has been arguable that employees on long term sick leave, who are unable to take their leave in the leave year, continue to carry that leave over despite the provisions of the Working Time Regulations (which suggest that paid annual leave is lost on the renewal of the leave year).

Recent Employment Tribunal decisions have suggested that if a long term sick employee does not elect to take the leave during the leave year then he/she will lose that right. The EAT however has now handed down a decision which is authority for the proposition that the entitlement to paid annual leave of a worker absent for the whole of the pay year through sickness does not depend on the worker submitting a request for such leave before the end of a relevant pay year.

The employee was sick for the whole of the pay year of 2009/2010. She was later dismissed on the grounds of incapability/ill health. Her employer refused to make any payment in respect of her untaken annual leave on the grounds of no formal request for leave had been made (previous Tribunal authorities, albeit not binding, had suggested there may be a defence for employers in this situation). The issue on appeal was whether or not the failure to make such a request had precluded the normal entitlement to paid annual leave following dismissal.

The EAT gave a decision which supports employees and is bad news for employers. It not only followed the Spanish case of Pereda v Madrid Movilidad SA (in which it was held that an employee who had been injured during the period of booked annual leave and therefore off sick for that leave remained entitled to a replacement period of leave on return), but following that reasoning, said the Claimant in this scenario had been unable to take her annual leave by reason of sickness therefore she retained her “right to enjoy a period of relaxation and leisure” or payment of lieu of that on dismissal in the following year.

The only hope for employers is that the EAT stated (in a part of the Judgment that is not binding) that it may be different for a fit employee who fails to make any request for leave during the whole of the pay year, as that employee may have had the opportunity to exercise his or her rights. Watch this space for further developments.