Holiday pay decision

The position regarding holiday pay for those on long term sick leave has recently been clarified by the European courts. The UK courts had suggested that workers on long terms sick leave should not accrue holiday entitlement, on the basis that they are already on leave. However this has been overruled by the European Court of Justice (“ECJ”), who has confirmed that a worker on sick leave will still accrue holiday. This includes where a worker has been off for an entire year, in which case 28 days of their leave will be considered to be holiday and they will be entitled to holiday pay. The decision is perhaps not surprising as this is also the position with a woman on maternity leave, as she will also continue to accrue holiday during this time.

In addition to the decision regarding sick pay, the ECJ also confirmed that a claim for holiday pay can be made not only under regulation 30 of the Working Time Regulations 1998 (“WTR”) but also as an unlawful deduction from earnings under S23 of the Employment Rights Act 1998. The significance of this being that rather than a claim being limited to three months from when the holiday was due or payment was due and therefore being limited to one holiday year (as under the WTR), a claim can be brought within three months of the last in a series of deductions, opening up the potential for a worker to claim unpaid or underpaid holiday stretching back several years.

For further information or any queries relating to holiday pay, sick leave or other such matters contact Rhian Philips or Theresa Mimnagh on 01273 236 236

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