Holiday Entitlement and Sick Leave

Employees will now have to be paid for holiday not taken due to sickness absence, or allowed to carry it forward to a following year, and also receive payment for any holiday remaining at the end of a contract.  This is the result of a Law Lords ruling, which overturned the Court of Appeal decision following consultation with the Eurpean Court of Justice.

Holiday leaave continues to be accrued while a worker is off sick, even when they have exhausted their sick pay entitlement.

The financial implications could be very significant because claims for unpaid holiday may be made under the Emloyment Rights Act 1996 (ERA) as well as the Working Time Regulations 1998 (WTR).  This means that claimants may be able to recover holiday pay going back as far as 1998 because of the time limit available under the ERA.