It is now well understood that if workers are prevented from taking their holiday entitlement because of sickness they must be allowed to take it following their return to work, even if this means carrying the holiday forward into the next leave year. If the holiday has not been taken by the time the employment terminates, then the worker should receive compensation for it. The right to carry-over unused holidays due to sickness absence applies regardless of whether or not the worker has requested that it be carried over before the end of the holiday year in question.
These principles derive from European case law, not the Working Time Regulations 1998. Therefore, it was the EAT’s view that they only applied to the 4 weeks’ Euro leave provided for under the Working Time Directive and not to the additional 1.6 weeks UK workers are entitled to in terms of the Regulations (Sood Enterprises v Healy). This has now been confirmed by the European Court of Justice in the recent Finnish case of TSN v Hyvinvointialan. The Directive lays down and regulates the minimum health and safety requirements on the organisation of working time – it is up to member states to decide on the conditions for granting, exercising and extinguishing any periods of leave over and above that minimum.
Therefore, unless there is a contractual agreement permitting the carry over of the entire annual leave entitlement if it is unused due to sickness absence, there is no right in the UK to carry over more than 4 weeks.
Workbox has a dedicated page on Holidays and Sickness Absence which looks at the accrual, taking and carry over of annual leave in more detail.