Carrying forward unused holiday after sickness

A worker who has not been able to take their statutory holiday during the holiday year because of sickness must be allowed to carry that unused holiday forward into the next holiday year, even if the employment contract expressly forbids this (Dominguez v Centre Informatique du Centre Quest Atlantique [2012] EUECJ C-282/10).

However, this right to carry forward statutory annual leave is not without limits. In KHS AG v Winfried Schulte [2011] EUECJ C-214/10, the ECJ confirmed that unused holiday must not be allowed to build up indefinitely, because otherwise the leave would lose its main purpose as a rest period, and instead become “merely a period of relaxation and leisure”. It would also cause problems for the employer, who would be storing up a liability to pay for large amounts of unused leave if the employment eventually ends due to sickness absence, and may struggle to organise work to cover the absence.

Instead, the ECJ says that collective agreements and national laws can provide for a cut-off point for any carry forward of annual leave, although that cut-off point must not be too short. As a guide, in Schultz-Hoff v Deutsche Rentenversicherung Bund [2009] EUECJ C-350/06, a carry-over period limited to six months was found to be too short, whereas the 15-month cut-off point in the Winifried Schulte case was judged acceptable.

The UK government wants employers to be allowed to insist that leave unused due to sickness absence is taken during the current holiday year if there is still time left in which to take it. It also wants to give employers the right to require employees to take that leave in the following year, if there are good business reasons for carrying it forward. However, it is not clear whether ECJ case law allows either option.

The right to paid holiday when off sick is not dependent on making a request to take that holiday, whether the worker works in the public or the private sector. This was decided in NHS Leeds v Larner [2012] EWCA Civ 1034, a case supported by general union Unite. The Court of Appeal concluded that NHS Leeds was not entitled to insist that Ms Larner make a request to take her holiday as a condition of being paid for it when her employment ended due to ill health.

In Sood Enterprises Limited v Healey [2013] UKEAT 0015/12/B1/1403, the Scottish EAT has ruled that the right to carry forward statutory annual leave unused due to ill health absence does not apply to the extra 1.6 weeks’ of statutory leave under the Working Time (Amendment) Regulations 2007. This is because the Working Time Directive allows member states to make their own rules in respect of any leave exceeding the four weeks provided by the Directive (Neidel v Stadt Frankfurt am Main [2012] EUECJ C-337/10).

Holiday taken during sickness absence must be paid at the normal rate of pay (see page 117), even if all rights to contractual and statutory sick pay have been exhausted.