There have been a handful of cases recently dealing with the ability of employees on sick leave to work elsewhere and take holidays.

Working while on sick leave

In Perry v Imperial College Healthcare Trust (22 July 2011) the Employment Appeal Tribunal (EAT) upheld a claim of unfair dismissal brought by an employee who had been dismissed by a Trust when it discovered she had continued to work for another employer (a PCT) when on  paid sick leave due to a chronic knee problem.

The claimant worked for the Trust as a part-time midwife, a job which required her to be mobile.  Her role with the PCT was clinic-based within 100 yards of her home and was, therefore, less physically demanding.  Both jobs were part-time.

In deciding that the Trust’s decision to dismiss the claimant was unreasonable the EAT noted that the claimant was permitted to have a second job; it was acceptable for her to be off sick from the Trust whilst, at the same time, being fit to continue her work with the PCT; and she had not received sick pay from the Trust for hours during which she was working for the PCT as the hours of work of the two jobs did not overlap.  At most, the claimant had been at fault in failing to ask permission to continue working for the PCT, as required by her terms of employment, but that alone could not justify dismissal.

Holidays and sickness

At the beginning of November, the EAT confirmed that workers are only entitled to holiday pay under regulation 16 of the Working Time Regulations 1998 (WTR) when they actually exercise their right to take the leave in question (Fraser v Southwest London St George’s Mental Health Trust, 3 November 2011).  The EAT made the point that the same principle applies when an individual is on long term sick-leave, in that an employee who wishes to take annual leave under the WTR during a period of sickness absence must give notice of an intention that part of their absence should count as holiday.

The EAT recognised, however, that the ordinary ‘use it or lose it’ rule in the WTR may have to be adapted in the case of employees on sick leave, in light of earlier rulings from the Court of Justice of the European Union (CJEU).  It is clear from those cases that, under the EU Working Time Directive (on which the WTR are based), workers on sick leave have a choice: they can choose to take annual leave during the period they would anyway be absent sick, or they can insist on postponing their annual leave and taking it at a later date, possibly even in a subsequent leave year if it is not possible to schedule leave before the current year ends.  In contrast, the WTR expressly state that annual leave cannot be carried forward from one year to the next and there has been much debate about whether the regulations can be interpreted consistently with the Directive.  If not, public sector employees may be able to rely on the Directive itself to enforce their rights.

There has still not been a definitive ruling on those points, but in this most recent case the EAT acknowledged that if the claimant had asked to carry forward her annual leave into a subsequent leave year, her employer might have had to agree to the request (but she would still have had to take her leave to qualify for payment under r16). The EAT also noted that workers are entitled to a payment in respect of accrued untaken leave on termination of their employment (under regulation 14) and that this might have to be read as including leave from previous years in the case of sick employees.  Indeed this is how the EAT appears to have interpreted the regulations in another case from earlier this year when it ruled that an employee who had been on long term sick leave was entitled, under the WTR, to be paid for untaken holidays from the previous leave year when her employment ended (NHS Leeds v Larner 29 June 2011).  There is a suggestion in the Fraser judgment, however, that previous years’ untaken leave would only have to be counted if the worker has not had a chance to take that holiday before their employment came to an end.

More recently the CJEU has ruled that the Directive does not give workers on long term sick leave an unfettered right to carry forward untaken holiday indefinitely (KHS AG v Winfried Schulte, 22 November 2011).  The Court reasoned that allowing a worker to take accrued leave several years after the leave year to which it related would not achieve the Directive's purpose of enabling the worker to recuperate from the effort and stresses of that year.  With that in mind, the CJEU ruled that a German national law does not breach the WTD where it provides that the annual leave entitlement of a worker who is unfit for work for several consecutive holiday years expires 15 months after the end of the relevant leave year.  The CJEU did not spell out whether a shorter carry forward period might be acceptable, although reading between the lines, it will be difficult to argue for a shorter period.

We can expect further developments in this area next year when the case of NHS Leeds v Larner is considered by the Court of Appeal.  Furthermore, the Government has recently consulted over potential amendments to the WTR to reflect the existing European case law in this area. This decision of the CJEU is now likely to influence the shape of those amendments.