Workers on long term sick leave entitled to holiday pay

In three linked appeals (Kigass Aero Components Ltd v Brown, Bold Transmission Parts Ltd v Taree, Macredie v Thrapston Garage), the Employment Appeal Tribunal has held that under the Working Time Regulations 1998 workers who are absent from work owing to long-term sickness are entitled to holiday pay.  This is so even where the worker has been absent for the entire leave year in question.

The EAT made the following points:

  • The entitlement to paid annual leave arises if the individual is or has been a “worker” during the whole or part of the leave year – there being no requirement on the individual to have served “working time” before becoming entitled.
  • The term “worker” does not mean that the individual has to have done some work or attended work.
  • That unless the worker’s contract is terminated, he or she is only entitled to be paid for the period of annual leave which he or she has taken.
  • If a worker wants to take annual leave, he or she must give notice to their employer.

In practical terms, employers may want to think again before keeping employees on long-term sickness absence since with it comes a liability to pay the employee four weeks salary a year.  However, employers should be aware of the possibility of employees making claims of unfair dismissal and disability discrimination should they feel aggrieved about the termination of their contracts whilst on long-term sick leave.

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