Carrying Over Holiday Pay When Sick
Much to the inconvenience of many employers it has been clear for some time that workers can accrue holiday entitlement while off sick.
Employees who have returned to work after a long sickness absence, potentially spanning several years, can request holiday pay upon their return or termination of employment.
The Employment Appeal Tribunal (EAT) has helpfully clarified the position in a manner welcomed by employers.
In a key case the employee had been absent on sick leave without pay for two years. When the employment was terminated the employee claimed for holiday pay that had accrued during her absence. The EAT came down on the side of the employer, stating that the employee had not provided the employer notice that she wanted to take holiday even though she was off sick. In order to claim holiday pay, the employee should have actually provided notice and taken that leave whilst off sick.
In short, this puts an onus on an employee who is absent because of sickness to give adequate notice of their intention to take holiday. Essentially, the employee must actually have taken the leave for which the payment is claimed.
However, the European Court in the case of KHS AG v Schulte provided a judgement that casts doubt on this decision. The European Court stressed in its judgement that the entitlement to paid holiday is a stringent principle of EU Social Law from which no derogations are possible.
In a nutshell, there is now some doubt as to whether employees automatically have an entitlement to receive paid holiday during sickness absence accrued over several years, when they may not have actually provided proper notice under the Working Time Regulations.