26/02/2010

Employment e-Brief – Working time holiday update

The first reported decision in relation to the effect of the European Court of Justice’s decision in Pereda v Madrid Movilidad SA has now come through.  The case of Shah v First West Yorkshire Ltd dealt with the question of whether or not an employee who was sick during a period of annual leave was entitled to reclaim that annual leave, and carry it over into the next holiday year.

The Claimant in this case had booked a 4 week period of annual leave between February and March 2009.  Prior to that annual leave commencing, he broke his ankle, and was absent from work due to illness from January 2009 to April 2009.  During that period he received contractual sick pay, with the exception of the pre booked period of annual leave, when he received full holiday pay.  A request to reclaim those days of annual leave when he was ill, was denied on the basis that the employer’s holiday year ended at the end of March.  As you will be aware, the Working Time Regulations do not allow for carry over, and an entitlement to annual leave is confined to the specified leave year only.

The Claimant brought a claim at the Employment Tribunal, and the Tribunal concluded that the ECJ decision in Pereda required national law to permit an employee who becomes ill during annual leave to take that annual leave at a different time, and that includes allowing carry over to a different holiday year.  Therefore, Regulation 13(9)(a) of the Working Time Regulations should be construed to read that leave may only be taken in the leave year in respect of which it is due “save where a worker has been prevented by illness from taking a period of holiday leave, and returns from sick leave, covering that period of holiday leave, with insufficient time to take that holiday leave within the relevant leave year; in which case, they must be given the opportunity of taking that holiday leave in the following leave year”.

In other words, it is clear that Employment Tribunals are electing to implement the decision in Pereda in national law by adding words to the Working Time Regulations to make it possible.

No doubt, this decision and others like it will be the subject of appeal in due course, at which point we will achieve further clarification.  However, there is every indication that an employee’s right to reclaim annual leave lost due to illness is already a reality.

If you have any questions or queries please contact a member of the employment department.