This issue is one which has attracted significant attention over the last few years. This interest is mainly attributable to the landmark decisions in Stringer v HMRC (where the ECJ confirmed that employees on sick leave do continue to accrue holiday leave) and Pereda v Madrid Movilidad SA (where the ECJ confirmed that employees who arrange holidays and then do not have the opportunity to exercise their right to those holidays due to illness are entitled to exercise that right at a later date).

Now, following on from the decision in Pereda, the case of NHS Leeds v Larner has again turned the spotlight on the issue of holiday entitlement and sickness. Mrs Larner had been absent for medical reasons for the whole of a holiday year and had made no holiday requests. She was then dismissed for capability reasons but was not paid for her untaken holidays. Her employer argued that, as she had not requested any holidays, her leave entitlement had expired at the end of the leave year.

Neither the Employment Tribunal nor the EAT agreed with this reasoning. They compared the facts in this case to those in Pereda and found that in both cases the employee had, due to illness, been unable to exercise their right to holiday, the fact that Mrs Larner had failed to request holidays was not relevant. As such, Pereda must be applied and, accordingly, the employee was entitled to payment for her untaken holidays.

The Court did note that had a fit employee failed to request holidays the position may have been different and that, in such circumstances, they may not have been entitled to take them at a later date as they would have had the opportunity to take them had they wished. The key aspect is that illness must have prevented the employee exercising their right to holidays – whether they had requested them or not. Accordingly, this decision is an interesting indication of the Tribunal's treatment of Stringer and Pereda and is an important practical decision for employers dealing with employees off sick who have not requested any leave.