Both the House of Lords and the ECJ ruled on the matter of holiday leave accruing during long term sick leave, particularly in cases where the employee has exhausted their entitlement to contractual and statutory sick pay. The key principles decided were:

  • Workers on long-term sick leave continue to accrue holiday even though their sick pay has been exhausted.
  • Where a worker is unable, or does not have the opportunity to take annual leave, they will be entitled to carry it over into a subsequent holiday year. The House of Lords did not give guidance as to what 'unable' means.
  • An employee can bring a claim for holiday pay as an unlawful deduction from wages claim within three months of the last in a series of deductions. Such claims are not limited to the previous holiday year and can therefore span back a number of years. Claims under the Working Time Regulations (WTR) are limited to the previous holiday year and so this is a significant change for employers.
  • If an employer refuses the employee the right to take holiday while on sick leave, the employee is likely to have a claim. If the employer has refused the right for a number of years, this claim can build up to the point where the employer has a large bank of unpaid holidays. HM Revenue and Customs v Stringer and others (2009)