We have previously reported in client briefings on the inter-relationship between sick pay and holiday pay and most recently on a decision of the EAT to the effect that, in order for a sick worker to be afforded the right to carry forward holiday, they would have to actually request that holiday.

The Court of Appeal has now ruled in NHS Leeds v Larner that there is in fact no such requirement on workers, contrary to what previous authorities had suggested. This latest decision is in keeping with the general pattern of caselaw emerging from Europe which underlines the importance of rest for workers.

Mrs Larner had been off work all year on sick leave and she had claimed that when her employment terminated she was entitled to be paid in lieu for her annual leave entitlement from the previous leave year.

Specifically, Mrs Larner had been on sick leave continually from 5 January 2009 to 8 April 2010, when her employment was terminated. Her Employment Tribunal claim was for payment in respect of the statutory holiday entitlement for the leave year from 1 April 2009 to 31 March 2010 (for the whole of which time she had been on sick leave). The employer had argued that she was not so entitled, because she had not requested to take that leave nor for it to be carried over.

The Court of Appeal found in Mrs Larner’s favour. The fact that she had not requested holiday nor asked for it to be carried forward during the previous leave year did not mean that she lost right to payment for that holiday when her employment ended.

The Court of Appeal agreed to purposively interpret the Working Time Regulations 1998 so as to allow workers to carry forward annual leave if they were unable or unwilling to take it because they had been on sick leave (contrary to the express wording of the Regulations, which seem to prohibit carry-over).

What is less clear is how much holiday an employer must allow an employee to carry over, specifically whether employers must allow the full 5.6 weeks’ holiday provided for by the domestic Working Time Regulations to be carried over or just the bare minimum of 4 weeks provided for by the governing European Directive.

Sadly, the Court of Appeal declined to determine how the additional 1.6 weeks provided for under the domestic Working Time Regulations should be treated, commenting that it was “unpersuaded of the wisdom” of determining that issue. It may be that employers can decide not to allow the additional 1.6 weeks to carry over, particularly in light of European cases such as Nieldel v Stadt Frankfurt am Main which have suggested in other contexts that a distinction can be drawn between the minimum 4 week entitlement and a more generous domestic entitlement. However, there will continue to be uncertainty on this issue until the point is addressed further in legislation reform or further case law developments.