Yesterday’s Court of Appeal decision in NHS Leeds v Larner confirms that workers on sick leave can carry forward unused statutory holiday entitlement without needing to make a formal request to do so. This applies not only in the public sector – where the Working Time Directive has direct effect – but also to workers in private companies. In the latter case, although they can not rely on EU law directly, the Court of Appeal now says it is possible to interpret our domestic legislation (ie the Working Time Regulations) to give effect to the Directive in this respect.

This is the end of a very long legal road, which started not long after the Regulations came into force in 1998. Ever since then the courts have been grappling with the relationship between the absolute prohibition against carrying forward leave in the Regulations and the problems which arise when workers are on long-term sick leave and unable to use their holiday entitlement. Ironically this decision has emerged shortly before the Government is due to bring forward amendments to the Working Time Regulations to clarify just this point.

In its consultation on modern workplaces published last year the Government proposed a number of amendments which would broadly speaking reflect the impact of Larner and the earlier decisions it builds on. The consultation also addresses a point which did not arise in Larrner, but has now been the subject of a decision of the European Court of Justice (see our posting here). That ruling confirmed that the principle of carry forward in the event of sickness applies only to the four weeks’ leave guaranteed by the Directive. The Government proposes that only the core four week entitlement can be carried forward. In this respect at least it appears to have correctly anticipated the direction of ECJ case law.