Yes, according to the President of the Employment Appeal Tribunal in Fraser v Southwest London St. George’s Mental Health Trust.
There have been a flurry of cases recently in which the courts and tribunals have sought with notable lack of success to get to grips with the various ECJ decisions on the inter-relationship between sickness and holiday. In Fraser the key issue was whether a worker must actually make a request to take holiday in order to trigger the right to holiday pay.
Mrs Fraser went off sick in November 2005 and remained so until her employment was terminated in October 2008. She then brought a claim in the Employment Tribunal for holiday pay for the years she had been off sick. The Trust argued that she was not entitled to any holiday pay whilst off sick because she had never actually asked to take any leave. It pointed out that Regulation 15 of the Working Time Regulations 1998 says that if workers wish to take statutory holiday they must give notice to their employer specifying the days on which they wish to take that leave. There was nothing to suggest that Regulation 15 did not apply to workers who were off sick and as Ms Fraser had not exercised her right to request and take annual leave she was not entitled to be paid for it, so hard luck to her (paraphrasing slightly, of course).
Even the most optimistic gambler might think the Trust was on to a loser with this one, bearing in mind the thrust of recent case law. But no, the Tribunal and the EAT upheld the Trust’s defence and said that workers are only entitled to holiday pay if they have actually taken the leave in respect of which they are seeking to be paid, and have done so in accordance with the WTR, i.e. by giving notice under Regulation 15. In the EAT’s view, a thing of beauty in its logic and simplicity, “it cannot be right for employees to receive holiday pay for leave which they have never taken”. It accepted that it was slightly artificial to require employees on long-term sick leave to give notice to take holiday, but said that this merely reflected the artificiality of long-term sick leave counting as holiday at all!
But how does this decision sit with recent ECJ decisions which make it clear that workers on long-term sick leave who are unable to take their holiday during a particular leave year are entitled to carry it over to a subsequent leave year and be paid for it then? The EAT said it was comfortable that its decision was consistent with recent ECJ authority. After all, in this case there was no suggestion that Mrs Fraser had been unable to take her holiday during the period when she was off sick. She simply had never asked to take it. According to the EAT, Mrs Fraser could have chosen either to take holiday during her period of sick leave or to ask for it to be deferred to a subsequent year. As she had not done either she effectively lost her statutory holiday entitlement and with that, the right to be paid for it.
Clearly this decision is useful for employers, especially for those seeking to defend claims for unpaid holiday pay stretching back several years. However, only a few months ago a different division of the EAT reached exactly the opposite conclusion. In NHS Leeds v Larner the EAT gave short shrift to the employer’s argument that an employee was not entitled to be paid holiday pay because she had not asked for it. It concluded that employees who are off on long-term sick leave for the whole holiday year are entitled to have their unpaid statutory leave entitlement carried over from one leave year to the next, even if they have not made a formal request to take the holiday or for it to be carried over. The EAT in Fraser seems to have dealt with Larner simply by ignoring it – it was not mentioned at all – but that is not a long-term solution to the question, so unfortunately it seems that further litigation in this area is inevitable.
In the meantime, despite the uncertainty in this area it is clearly open to employers to run the argument that a sick employee is not entitled to holiday pay if in any holiday year he has not made a request to take the leave or asked for it to be deferred to a subsequent year. Just don’t be surprised if some later decision changes the position back again!
As an aside, we are still waiting for the Government’s response to its “Consultation on Modern Workplaces” in which it proposed various amendments to the WTR so that the current prohibition on carrying over leave from one year to the next will not apply in some circumstances. Effectively it has said that it will limit the ability of workers on long-term sick leave to carry over annual leave from one holiday year to the next to the four weeks’ leave required under the Directive, i.e. excluding the additional 1.6 weeks’ leave required by the WTR and any additional contractual leave. Whilst the Government’s proposals would lessen the financial size of the problem for employers, it will not affect its complexity and it still leaves the unresolved issue of how far you can genuinely take holiday and sick leave at the same time and whether you actually need to ask to take the leave or for it to be carried over. Surely it cannot be beyond the wit of the ECJ to produce and stick to a definite position on all this? Even if we are left with the underlying absurdity of an entitlement to take holiday on health grounds at a time when already off sick, some certainty one way or the other would benefit employers across Europe.