Sick leave – implications on statuary annual leave

Plumb v Duncan Print Group Ltd EAT/0071/15

The Employment Appeal Tribunal (EAT) has held that where an employee chooses not to take statutory annual leave during sick leave, (s)he can carry forward the untaken annual leave for up to 18 months from the end of the leave year in which the leave arises.

Implications for employers

Employers must allow employees to carry forward their basic statutory entitlement to four weeks’ annual leave in each year if the employee does not take this leave while on sick leave, whether through choice or inability to take leave because of ill-health. The employer should also pay the employee for accrued annual leave entitlement on termination of employment.

Background

Mr Plumb, a printer employed by Duncan Print Group Ltd, did not take paid annual leave for three leave years while he was on sick leave following an accident at work. On termination of his employment, Mr Plumb claimed payment in lieu of accrued statutory annual leave of four weeks for each of the three leave years under the Working Time Regulations 1998 (SI 1998/1833).

In reviewing the case the EAT summarised the principles for entitlement of an employee to annual leave while on sick leave as follows:

  • If the employee is not permitted under his or her contract of employment to take annual leave during a period of sick leave, the employee is entitled to take annual leave in a subsequent leave year.
  • If the employee is permitted to take annual leave while on sick leave, he or she can choose to take annual leave during the period of sick leave, but is not required to do so, and may take the annual leave at a later date.

The EAT also stated that it would not be consistent with the underlying purpose of sick leave (to enable recovery from illness) and annual leave (to enable a worker to enjoy rest and relaxation) to compel a worker on sick leave to take annual leave at the same time.

However the EAT considered that it is necessary to impose a limit on the carry-forward of annual leave. The EAT held that art.7 of the Working Time Directive requiring member states to ensure that a worker is entitled to four weeks’ annual leave is satisfied, where a worker is on sick leave, if annual leave can be taken within 18 months of the end of the leave year in which it arises.  In conclusion, the EAT held that Mr Plumb was entitled to compensation only for annual leave not taken in the later of the three leave years. Mr Plumb had requested annual leave within a period of 18 months after the end of the third leave year that he was on sick leave.

Source:  www.xperthr.co.uk