Ford & Warren News

Important employment law update - Holiday Pay Decision Made

The Employment Appeal Tribunal today gave guidance on the contentious issue of holiday accrued during an employee's sickness absence.

In the case of NHS LEEDS v LARNER UKEAT/0088/11 the Honourable Mr Justice Bean considered the issue of entitlement to annual leave under the Working Time Regulations 1998 afresh having regard to the European Court of Justice cases of Stringer and Pereda. He ruled that:

1. The key issue is whether an employee has had an opportunity to exercise her right to take her annual leave.

2. If an employee is on sick leave for the whole of a leave year then she can request to take her annual leave during her sickness absence but is not obliged to do so and she is not obliged to request that her annual leave be carried forward to the following leave year. She automatically retains her entitlement to annual leave until she has an opportunity to take it, even if this means it is in a new leave year.

3. If an employee is not sick during a leave year then her annual leave entitlement will be lost if she does not request to take it before the end of the leave year.

4. If an employee is on sick leave for part of a leave year and works for part of a leave year, then it is a question of fact in each case whether or not the employee had an opportunity to take her leave during her leave year. If yes, then her entitlement to annual leave will be lost at the end of the leave year. If no, then she would retain her entitlement to annual leave until she had an opportunity to take it, even in a new leave year.

This decision helps to resolve some but not all of the uncertainty surrounding holiday pay. If you have any questions then please get in touch with a member of our Employment Team: Email or Email

Our Team is ranked in the Chambers & Partners legal publication for the provision of employment law services and would be happy to assist.