Carrying over holiday accrued during sick leave – not as detrimental as it sounds

Businesses have adapted to the ECJ decisions in the conjoined cases of Stringer and Schultz-Hoff resulting in employees accruing holiday when they are on sick leave. The sometimes substantial amounts of holiday accrued (but not yet taken) because the employee has been on long-term sick leave (due to for instance cancer or HIV) is usually practically dealt with by using up the accrued holiday entitlement at the end of a capability (ill-health) dismissal and thus bringing forward the (hypothetical) last day in the office.

But what happens if the employee has been off sick for years and has accrued significant amounts of holiday? In the case of Plumb v Duncan Print Group Ltd the EAT held that Mr Plumb did not have to show that he was unable by reason of illness to take holiday for it to be carried forward. However, the right to carry forward is not unlimited. Regulation 13(9) of the Working Time Regulations 1998 (WTR) must be interpreted to give effect to the relevant EU Directive.

It should be noted that UK case law has only extended this to the four weeks leave granted by Regulation 13 of WTR and not any additional leave under Regulation 13A. The Plumb decision followed both the principles of the International Labour Organisation and the Convention of Holiday Pay. The accrued but untaken annual leave can be limited to 18 months carry forward from the end of the leave year and cannot be carried forward indefinitely. The Directive and ECJ case law is also very clear that national law does not have to implement unlimited carry forward without limit. Mr Plumb was therefore entitled to payment in lieu of annual leave for 2012, but not for 2010 and 2011. Both parties were granted leave to appeal so perhaps watch this space?