It is now well established that whilst employees are on sick leave (particularly those on long term sick leave), there is no requirement for them to take holiday leave and as such it continues to accrue until such time as they request to take it or are capable of taking it. The Employment Appeal Tribunal ("EAT") had to consider two further points on this: (a) whether an employee must prove that they are incapable of taking holiday during sick leave in order not to take it during this period of leave and (b) for how long accrued holiday leave can be carried forward.
The EAT has confirmed that an employee on sick leave cannot be compelled to take holiday leave during the sick leave period, nor do they have to demonstrate that they are incapable of taking it. The employee must either request to take holiday leave during the sick leave period or reach agreement with the employer to do so. The EAT further ruled that any holiday leave that does carry over must be taken within 18 months of the end of the year in which it accrued.
This case concerned an employee who was on long term sick leave due to a work related accident. The employer's holiday year ran from 1st February to 31st January and the employee was on sick leave from April 2010 to January 2014 (when he was terminated), a period of almost four years. Upon termination, the employer paid the employee his holiday entitlement for the holiday year in which he was terminated, but refused to pay for his accrued holiday entitlement during the sick leave period for previous holiday years. The case is unusual because the employee was undergoing shoulder surgery (on three different occasions) but had continued to work weekends. At the Employment Tribunal stage, the ET considered the question of whether the employee was capable of requesting and taking holiday leave during the sick leave period and found that he was in the absence of any medical evidence to suggest otherwise.
The EAT ruled that the ET had taken the wrong approach. Previous case law did not lay down a rule that an employee must be able to show that he is incapable of taking holiday leave during a sick leave period. Sick leave is for the purposes of recovering from sick leave and there is no requirement to assess whether or not an employee is capable of taking holiday leave during it, that is a decision for the employee to make. An employer must assume that the employee is incapable of taking holiday during a valid sick leave period. The EAT further ruled that any carryover of holiday leave must be taken within eighteen months of the end of the holiday year in which it accrued. Its decision was based on an interpretation of the relevant EU Directive and the Working Time Regulations.
The EAT's decision is not surprising and quite logical – sick leave is for the purposes of taking sick leave and it would open up too many legal issues if the position was that an employee must demonstrate that they are incapable of taking holiday during sick leave. In reality, the decision is likely to have little impact because if an employee is on valid sick leave, it is quite often supported by medical evidence and in most cases the employer will be fully aware of the employee's medical condition. It would be inappropriate to compel an employee to take holiday during sick leave in these circumstances.
The decision that any holiday leave carried over must be taken within the following eighteen months will be welcome news to employers as it provides certainty on the position. In this case, the decision meant that the employee lost his accrued holiday entitlement for the first two years of his sick leave period.
It must also be noted that the EAT gave the parties leave to appeal to the Court of Appeal so there may still be more to come on these two points – watch this space!
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