Holiday Pay Accrued During Periods of Sickness

In the case of Fraser v South West London St Georges Mental Health Trust, the Claimant lost her appeal against the original Tribunal decision that she should not be paid for the full amount of her unused holiday entitlement that she had accrued but could not take due to illness. She had claimed for the amount of unpaid statutory holiday pay in respect of the two previous leave years during which she had been away on long-term sickness absence

The claimant was a nurse who went on long term sick leave following an accident at work. She was eventually dismissed in October 2008. She claimed age and disability discrimination and unlawful deductions from wages in respect of her holiday entitlement under the Working Time Regulations. The original Employment Tribunal dismissed both claims, the second because she had given no notice of any intention to take annual leave during the years in question as required by regulation 15 of the Working Time Regulations.

At the Employment Appeal Tribunal, she argued that, as a matter of law there was no requirement that the claimant should have taken her leave by giving notice under regulation 15 in order to qualify for the payments sought and also, that if there was such a requirement, her employer was itself in breach of duty in not informing her of such a requirement.

It was not in issue before the Appeal Tribunal that the Claimant had accrued the right to claim annual leave in each of the two years in question. But the Trust's successful contention was that if she wanted to exercise that right she was obliged to do so by giving notice under regulation 15 (1) – which it was common ground that she had never done. She was therefore in no different position from any other employee who had not exercised their right to paid annual leave in a given year in that any such leave cannot be either commuted or carried forward.

As a matter of general guidance for clients, this case again highlights the relative complexity of issues to be taken into account when dealing with long term sickness and holiday entitlement. For all situations however, there is a fundamental need to ensure that a proper policy statement on the issue exists within the employee handbook or written statement of main terms and conditions of employment which makes clear that holidays cannot be carried forward from one year to the next and also what precise steps are necessary to request holiday leave.

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