Limiting sick workers from carrying forward accrued annual leave indefinitely

A recent EAT decision relating to the rules on carrying over annual leave accrued during sickness absence will be of interest to employers. Plumb v Duncan Print Group Ltd clarifies two issues with regard to holiday and sick leave: firstly that the right to carry forward accrued annual leave is not unlimited and, secondly that it is open to workers even if the reason for their leave accruing is that they were unwilling, as opposed to unable, to use it during their sickness absence.

The Working Time Regulations 1998, which contain the domestic legislation on annual leave, provide that it must be taken in the leave year in respect of which it is due (Regulation 13(9)). However, there is an exception to this rule for workers that are on sick leave as a result of the Court of Justice of the European Union decision in Stringer (Stringer v Revenue and Customs Commissioners C-520/06), which was given effect into UK law by the High Court . These workers are able to carry over their accrued annual leave, and Mr Plumb argued that this right allowed him to do so without any time limitation. The EAT concluded that the Regulations should be read as limiting the worker to taking annual leave within 18 months of the leave year within which the leave accrued. This decision is a sensible one, recognising that neither the European Working Time Directive nor European case law requires Member States to allow accrued leave to be carried over indefinitely. In their Modern Workplace Consultation in May 2011, the Government consulted on whether to include a limitation in the Regulations, though this never materialised. Whilst in practice many UK employers considered that the ability to carry over accrued annual leave should be subject to a limitation period, the decision provides a welcome clarification on this point.

The EAT also confirmed that a worker’s ability to carry forward leave is not affected as a result of their failing to request leave, or simply being unwilling to take the leave, during their sickness absence. This follows the principle established in the earlier Court of Appeal decision in NHS Leeds v Larner [2012] EWCA Civ 1034 that it is not necessary for a worker on sick leave to request annual leave in order to carry this forward. Furthermore, the EAT confirmed that a worker is able to benefit from accrued annual leave even if the only reason for the leave accruing was that they were unwilling to use it during their sickness absence.

This case provides useful clarification in an area of employment law which has seen considerable development in recent years, and continues to do so. The calculation of holiday pay has been one such area sharply felt by employers, with the case of Lock v British Gas [2014] ICR 813 awaiting appeal to the EAT.

This article first appeared in Law-Now, CMS Cameron McKenna's free online information service, and has been reproduced with their permission. For more information about Law-Now, click here.