Two new rulings on annual leave while sick

Must a sick employee request annual leave?

In a related case the EAT has decided on the proposition that the entitlement to paid annual leave of a worker absent for the whole of a pay year through sickness does not depend on the worker submitting a request for such leave before the end of the relevant pay year (NHS Leeds v Larner).

The appellant was off sick for the whole of a pay year and was subsequently dismissed on grounds of incapability due to ill-health.  However, her employer refused to pay for her untaken annual leave on grounds that no formal request for leave had been made. The main issue on appeal was whether the failure to make such a request under Regulation 15(1) of the Working Time Regulations 1998 (as amended) precluded the normal entitlement to payment in lieu of annual leave following dismissal.

The EAT held that as the employee had been unable to take her annual leave by reason of sickness, she retained her “right to enjoy a period of relaxation and leisure”, or payment in lieu on dismissal, in the following year.

The EAT also stated that the position might be different in the case of a fit employee who fails to make any request for leave during the whole of a pay year, because such an employee would have had an opportunity to exercise his/her right.

Will accrued annual leave untaken by sick workers be unlimited?

Following decisions in 2009 about the accrual of annual leave by workers on long term sickness absence, in a new European Court of Justice(ECJ) case, KHS AG v Schulte, the Advocate General (AG) has given the opinion that Member States may provide for holiday entitlement accrued by workers on long-term sick leave to expire no earlier than 18 months after the end of the holiday year in which it arises.

The AG is suggesting that the ECJ ‘s decision in the Schultz-Hoff case, apparently ruling out any expiry of annual leave entitlement that a worker has not been able to exercise because of sickness, should be limited. The AG’s opinion is not binding but will be highly persuasive when the ECJ makes a final decision in the case.