Holiday entitlement continues when an employee is absent due to sickness. If an employee requests to take annual leave, whilst off sick, that is perfectly acceptable. However, if an employee does not request to take holiday, it continues to accrue to be taken once they have returned to work, or be paid for upon termination of employment. If the employee is prevented from taking the holiday during the holiday year due to sickness, an employer must allow them to carry forward the holiday into the next year.
When will holidays be forfeited or carried forward?
- A worker does not apply to take their full holiday entitlement in the holiday year
- A worker applies to take their holiday in the final month of the holiday year (i.e. December) but because December is the Employers busy period and holidays are not permitted to be taken in that month, the holiday request is refused.
- A worker applies to take their holiday in the final month of the holiday year but because holidays are granted on a first come first served basis and due to other employees having already booked their time off, the holiday request is refused, to maintain minimum staffing levels/operational requirements.
- A worker booked a holiday which was agreed but the employer asks the worker to cancel the holiday due to work activity/operational requirements. The worker agreed, but the worker was not able to take time off before the end of the year.
Providing there is no contractual term that provides for holidays, above the statutory minimum, to be carried forward into the subsequent holiday year, we believe that holidays should be forfeit in scenarios 1,2,3 above and 4 is arguable.
However if you deprive a worker of their holiday entitlement, the worker might challenge that decision before the Employment Tribunal.
Finally… A reminder
On a more positive note, you may remember that one of the significant problems arising from the holiday (commission/overtime) pay cases, workers could potentially seek to recover the series of underpayments to their previous holiday pay payments going back to when they joined their current employer, or to 1998 when the Working Time Regulations came into force. But hold tight and note the Deduction form Wages (Limitation) Regulations 2014 (effective 8th January 2015) put a limit on unlawful dedications claims to two years before the date the claim is lodged. This limiting piece of legislation only applies to tribunal claims presented on or after 1st July 2015; so many new holiday claims lodged at the Employment Tribunal on or after 1st July 2015 can only claim for underpayment going back two years.
Michael Menzies Baird