How long can an employee carry unused annual leave forward for when they’ve been sick?

In recent years we’ve all got used to the idea that somebody who is on the long-term sick will continue to accrue holiday and be able to carry it forward if they have been unable to take that annual leave by reason of their sickness. A question arose recently in the case of Plumb -v- Duncan Print Group with an employee who had been on sick leave following an accident from April 2010 until his employment terminated in February 2014 of how long this can accrue for.

In July 2013 the employee sought to take the leave he had not taken since 2010. His employer agreed to pay him for annual leave for the 2013/14 leave year, i.e. the leave year that they were in at the time of the request, but wouldn’t make a payment in respect of previous holiday years. When his employment terminated the employee claimed for payment in lieu of annual leave for those years that he’s not been paid for.

The dispute between the parties was regarding whether or not an employee needs to give any evidence that he was unable to take annual leave during leave years as a result of sickness or whether somebody just needs to be absent on sick leave and to have not chosen to take annual leave during the relevant periods. The Employment Appeal Tribunal reviewed the European and UK case law and found that an employee who is absent from work on sick leave is not required to demonstrate that he or she is physically unable to take annual leave by reason of his or her medical condition. They just need to have not taken their entitlement.

However, the next question is whether any limitation ought to be placed on the right to carry holiday forward. The EAT looked at the European case law which allowed carry forward for a maximum of 18 months, and read our Regulation 39 of the Working Time Regulations 1998 accordingly. The employer had therefore done the correct thing and paid entitlement to payment in lieu of annual leave for the 2012/13 leave year, but no earlier.

This decision will come as a relief to employers who have been worried about things like employees staying on their books, for example, to stay on cover under permanent health insurance schemes – it reduces potential liability to such employees if they are not taking their holiday. However, if such an employee piped up and said they wanted to take their holiday they would be entitled to it and to be paid for it. Anyone advising employees is likely to tell them if they don’t want to lose holidays, they should use them.

As ever, the case law in this area emphasises the need for employers to manage sickness absence swiftly to ensure that people are not on the long-term sick for long periods of time.