Case study: The complex world of holidays and sickness

BACKGROUND: The complex world of holidays and sickness is an ever increasing minefield. However, a recent case Sood Enterprises Ltd v Healy helped clarify one aspect of how holiday pay is affected by sick leave.

BACKGROUND: The complex world of holidays and sickness is an ever increasing minefield.

However, a recent case Sood Enterprises Ltd v Healy helped clarify one aspect of how holiday pay is affected by sick leave.

After suffering a stroke, Mr Healy had been off sick for a year-and-a-half before he tendered his resignation. The company refused to pay him holiday pay and Mr Healy argued he was owed outstanding leave for that period he was off sick.

OUTCOME: The Employment Appeal Tribunal ruled that on the termination of his contract, Mr Healy had the right to receive payment in lieu of unused annual leave under the Working Time Regulations 1998.

However, annual leave should only carry over at the four week European rate, rather than the statutory minimum of 5.6 weeks under UK legislation.

The EAT decided that the additional 1.6 weeks leave that is given cannot be carried over into a new holiday year, unless there is specific written agreement in the contract.

This case helps to clarify that employees on long-term sick can carry over four weeks’ annual leave if they have been unable to take it during the leave year in which it accrued. The employee does not need to request to do this.