More on Holiday Pay & Long-term Sickness Absence

2 August 2012

NHS Leeds v Larner

There has been a further judgment on the relationship between holiday/holiday pay and long-term absence from work.

The Court of Appeal case of NHS Leeds v Larner [2012] EWCA Civ 1034 has made it clear that a worker who has not taken paid annual leave during a given leave year because of their long-term sickness absence is entitled to payment in lieu of that leave. Furthermore, the worker does not have to request carry-over of the annual leave in order for it to carry over. If the worker then leaves employment they should be paid in lieu of the accrued annual leave that automatically carried-over as a result of their long-term sickness absence (as well as any untaken accrued leave from the current leave year).

In the given case, Mrs Larner was on long-term sickness absence throughout her employer’s entire leave year 2009 to 2010. During that time she neither took paid annual leave nor requested for it to be carried over. Early on in the next leave year (2010 to 2011) she was dismissed. Mrs Larner was paid in lieu of accrued, untaken annual leave for 2010 to 2011, but not paid for the untaken holiday in 2009 to 2010. She brought a claim for unauthorised deductions from wages and breach of the Working Time Regulations 1998.

Mrs Larner was successful at the Employment Tribunal. NHS Leeds appealed to the Employment Appeal Tribunal and lost. NHS Leeds went on to appeal to the Court of Appeal and again lost.

The Court of Appeal heard the case because it was deemed to be an important issue for employers and employees to be sure of and because Employment Tribunals have not always been consistent when approaching this topic.

For those that read our November 2011 update on Fraser v Southwest London St George’s (here) ­ the Court of Appeal, in this case, noted that the different outcomes can be explained by the difference in facts. For example, in Fraser there was evidence that the employee could have taken annual leave between recovery and dismissal (11 months later).

To read the full judgment in NHS Leeds v Larner please click here.

If you have any questions in relation to annual leave, long-term sickness absence, and/or how these principles fit with maternity leave then please contact our team.