The 1998 Working Time Regulations (WTR) state that workers are entitled to annual leave in the leave year in which it is due. In NHS Leeds v Larner, the Employment Appeal Tribunal (EAT) said that a worker who was off sick for an entire leave year had the right to have her leave entitlement carried over and the right to be paid for it when her employment was terminated.
Mrs Larner’s union, Unite, instructed Thompsons to act on her behalf.
Basic facts
Mrs Larner, a clerical officer for NHS Leeds, went off sick on 5 January 2009 and was subsequently dismissed on the ground of incapacity on 6 April 2010. Her employer then sent her a letter saying that ‘a payment in lieu of notice and any outstanding leave will be made to you.’
Her contract stated that although she could accrue annual leave during any periods of sick leave, only five days of her leave entitlement could be carried over into the following leave year (which ran from 1 April to 31 March) if she put in a written request which was then approved. She had not requested any time off.
She claimed she was entitled to be paid for her annual leave for the whole of 2009 to 2010, but her employer said that she had lost it. As she had not submitted a request to carry over five days of holiday entitlement before the end of the pay year in accordance with her contract, she had forfeited it.
Tribunal decision
The Tribunal held that Mrs Larner was entitled to be paid for all her annual leave for the year 2009 to 2010 as she had had no opportunity to take it during the year 2009 to 2010.
Her employer appealed, arguing that Regulation 15(1) of the WTR meant that the usual entitlement to payment in lieu following dismissal did not apply.
Relevant law
Regulation 13(9) WTR states that workers can take leave in installments but only “in the leave year in respect of which it is due”.
Regulation 15(1) WTR states “A worker may take leave to which he is entitled under Regulation 13 and Regulation 13A on such days as he may elect by giving notice to his employer .....”
Regulation 16(1) WTR provides: “A worker is entitled to be paid in respect of any period of annual leave to which he is entitled under Regulation 13 and Regulation 13A ...”
EAT decision
The EAT held that Mrs Larner’s situation was analogous to those in the European cases of Stringer v HMRC (LELR weekly 105) and Pereda v Madrid Movilidad SA (LELR weekly 141).
It said that as Mrs Larner was signed off sick for the whole of the pay year 2009 to 2010, she must be presumed not to have been well enough to exercise what the Luxembourg court described as her “right to enjoy a period of relaxation and leisure”.
Instead, she had the right to have her leave entitlement under Regulation 13 carried over to the following year; and she had that right without having to make a formal request to carry it over. The right to be paid for that annual leave crystallised on the termination of her employment; as it happens, only a few days after the end of the pay year.
The EAT commented that the position might be different in the case of a fit employee who fails to make any request for leave during the holiday leave year. They might lose the right to take annual leave because that worker, unlike Mrs Larner, has “had the opportunity” to exercise the right to leave.