At last! A holiday pay ruling that doesn’t make your head spin or leave you with more questions when you put it down than you had before reading it.

Mr Plumb was off sick from his work at Duncan Print Group from April 2010 until the termination of his employment in February 2014.  He did not take or ask to take any holiday in the 2010, 2011 or 2012 holiday years (1st February to 31st January in each case).  In August 2013 he asked to take leave and was refused for reasons which don’t matter.  When his employment ended he was paid in lieu of untaken holiday for the 2013 holiday year and sued for the same for 2010-12.

In the Employment Tribunal he lost because he could not prove that he was physically unable to take the holiday.  However, since there is nothing which requires a holiday to be pain-free, active, abroad, outside your own home or even particularly enjoyable, one could argue that it will almost never be possible for an employee to show a level of physical incapability incompatible with this very low threshold.  Terrific! – the extended holiday accrual problem resolved at a stroke!   Sadly but entirely predictably, the Employment Appeal Tribunal gave this argument very short shrift.  Someone who is off sick can take holiday but cannot be made to do so.  If he chooses not to, then that untaken holiday is in principle carried forward until he can.

But not without limit in time.  Article 7 of the Working Time Directive allows EU member states to set limits on holiday carry-over, but Britain has not done so.  Nonetheless, that is not an open door to extensive retrospective claims.  The EAT noted that the origin of the Working Time Directive’s minimum holiday obligation lay in the protection of employees’ health and safety.  There has to be a point, it said, where the holiday is so far delayed after the time it was accrued that it could no longer realistically have any beneficial health and safety impact. [Of course this does raise a question over why statutory minimum holiday accrues at all in a year where the employee does no work he needs a break from, but that’s not important right now].

The International Labour Organisation adopted a Holidays With Pay Convention in 1970.  This says that of the four weeks WTD minimum holidays, one uninterrupted block of 2 weeks must be taken within one year of the end of the year in which the holiday accrued, and the balance within a further six months.  The Directive expressly provides that even though the Convention is not binding, account should be taken of the ILO’s principles with regard to the organisation of working time.  On that basis, the EAT knocked out Mr Plumb’s claim for leave in 2010 and 2011 because more than eighteen months from both had passed before he sought to take any holiday. However, eighteen months from the end of the 2012 year got him to July 2014.  Since his employment had ended before that, he was entitled to pay in lieu of 2012’s accrued but untaken holiday.

Points for employers:-

  1. It is probably open to employers to provide contractually for a lesser period of carry-over than eighteen months from the holiday year end.  Another case has suggested fifteen months.  Applying the principle that the holiday must have some meaningful health and safety value, it is hard to think that a twelve month cut-off would be objectionable and an argument could certainly be made for less.
  2. In particular, it appears possible to rely on the ILO Convention to say at least that half the WTD minimum holiday would be lost if it had not been taken within the following twelve months only.
  3. Even though it won on two of the three years in question, the employer was still ordered to pay Mr Plumb’s £1,515 costs of the appeal.