Holiday Pay and Sick Absence

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

It is clear from CJEU cases that workers continue to accrue annual leave entitlement during sickness absence, and that workers can choose to take annual leave at the same time as being absent due to sickness. But can such an employee claim holiday pay under Reg 16 (1) of the Working Time Regulations where no notice to take the leave has been given to the employer under WTR, Reg 15?

No, says the EAT (Underhill P) in Fraser v St George's NHS Trust. In this case the employee was injured at work and was on sick leave for four years until her dismissal. For the last two years of her employment she received no pay. On the ending of her employment she sought 4 weeks holiday pay in relation to each of those two years. In the light of Stringer v HM Revenue & Customs Commissioners [2009] ICR 932 there was no doubt that the employee had accrued the right to leave during the years in question. But the employer argued that if she wanted to exercise that right she had to give notice to the employer under Reg 15 (1) – which she had not.

The EAT held the claim should fail. An employee is only entitled to holiday pay under Reg 16 (1) if she has actually taken the leave to which the pay relates and has done so in accordance with the WTR by giving notice pursuant to Reg 15. The authorities of List Design Group Ltd v Catley [2002] ICR 686 and Canada Life Ltd v Gray [2004] ICR 673 were wrong, and Kigass Aero Components Ltd v Brown [2002] ICR 697 was to be preferred. The EAT also considered that the condition of notification by the employee under Reg 15 of the WTR was not inconsistent with the CJEU ruling in Pereda v Madrid Movilidad [2009] IRLR 959.