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Entitlement to statutory holiday pay is lost if not requested by employee on long-term sick leave

Posted on 20th November 2011
Case law

The EAT has held that employees on sick leave must give notice of their intention to take holiday.

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Fraser v Southwest London St George's Mental Health Trust EAT / 0456/11

The EAT has held that employees on sick leave must, to be paid for holiday under the Working Time Regulations 1998, give the required notice of their intention to take that holiday during the relevant leave year. If no notice is given the entitlement is lost. This is a case to be welcomed by employers because an employee on long term sick leave who does not give notice of his or her intention to take the statutory holiday will not be entitled to be paid for that untaken holiday.
 
A note of warning, however, this Fraser case directly conflicts with the recent EAT decision in NHS Leeds vs Larner, which held that a worker on long-term sick leave who does not request holiday is entitled to be paid for it on termination.  Sickness absence and the entitlement to payment on termination of employment for untaken holiday is our comment on the Larner case, which has been appealed to the Court of Appeal and until the confusion has been resolved employers should consider carefully what they should do when dealing with a request for pay for untaken holiday in this situation.

Background

Following an accident, Mrs Fraser (F) was off sick from November 2005 until her dismissal in October 2008. On her dismissal F was paid for her accrued but untaken holiday entitlement for the 2008/09 leave year but F brought a claim for statutory holiday pay for the previous holiday years 2006 and 2007. At no point during her absence on sick leave had F taken any accrued holiday nor had she requested to take any holiday.

The decision

The EAT rejected her claim for statutory holiday pay. It concluded she was not entitled to paid holiday as she had not asked to take it and the right to payment only arose under regulation 15 of the Working Time Regulations (WTR) where a request is made and leave is 'actually taken'. The EAT commented that the requirement for notice was not a 'formality' but a means by which the employer knows whether they are 'obliged to make any payment' for statutory holiday.
 
The EAT also recognised the 'ordinary rule' under the WTR which is 'use it or lose it'. It commented that 'the fact that the employment had, years later, terminated (as all employments eventually will)' should not 'create an entitlement to holiday pay which had not arisen at the time.'
 
Finally, the EAT held that the employer was not obliged to advise F of her rights about holiday entitlements.

You can read our summary on a later case at Holidays and sickness absence.

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