Holiday pay - more case law on the issue of untaken leave

Historically, many employers have taken the view that if an employee fails to take leave in the holiday year in which it is due then this leave will be lost. However, there have been recent changes in the law which have now clarified the situation for both employers and employees alike.

The case of NHS Leeds v Larner

In the case of Larner, Mrs Larner had her employment terminated by NHS Leeds after a prolonged period of sickness leave. Mrs Larner was absent from work sick throughout the whole of the holiday leave year 2009/10.  She was dismissed from her employment early on in the 2010/11 holiday leave year. NHS Leeds refused to pay her for the leave not taken in the year 2009/10.

The decision of the Court was clear. Leave could be carried over into the next year. No request need be made to allow this to happen. Mrs Larner was entitled to be paid for the leave she had been prevented from taking at termination, which was very early on into the next holiday leave year.

The case of Sash Window Workshop v King

The facts of the case of Mr King are perhaps not important. In fact, he lost his appeal in the EAT who said that the employment tribunal should not have allowed his claim for unlawful deductions as the loss in the case was compensation under the Working Time Regulations for not having the benefit of taking holiday. Unfortunately, his claim was out of time and therefore had to fail.

However, the important principle established in this case was that the EAT stated that sick leave may not be the only circumstance that could act as an impediment that could prevent an employee or worker from taking his entitlement to leave in a particular year of holiday leave. As such, circumstances beyond the control of the employee or worker which prevent them from taking leave in the relevant year should therefore allow the said leave to be carried over into the following year.

What does this mean for employers and employees alike?

If an employee has good cause for not taking his or her holiday entitlement within a specific holiday year then the employer must allow the employee to carry over any untaken holiday entitlement into the next holiday year. A failure to do so will lead to proceedings being taken.

What action should employers take?

• Employers should carry out a review of their contracts of employment and staff handbooks so as to make sure that their employee documentation is up to date and reflects the law as it stands.
• Employers should carefully record holiday leave and be aware of any potential difficulties that any employee or worker may face towards the end of the holiday year that may entitle them to carry over their untaken leave.

We hope that you have enjoyed this blog and found it to be informative. The blog represents the thoughts of the writer and is not meant to be specific legal advice to be relied upon in any particular set of facts.

At Chiltern HR we are a bespoke employment law practice, offering HR support and software to both small and large employees alike. For more information view our website at www.chilternsolicitors.co.uk or email us at info@chilternsolicitors.co.uk. Our office number is 01582 439795.

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