e-Bulletins
Sick Leave and Holiday Entitlement
In the first UK employment tribunal case to test the relationship between holiday and sick leave since the ECJ decision in Pereda, the Leeds tribunal in Shah v First West Yorkshire Limited has chosen to put aside UK law and follow the European decision. The ECJ ruled in Pereda that employees who fall sick whilst on holiday should be allowed to reschedule their holiday, even if it meant the employee would have to take it in the next holiday year.
Mr Shah had agreed with First West Yorkshire that he would take four weeks' holiday. However, prior to going on holiday he broke his ankle and took three months' sickness. This meant that Shah was sick during the period that he would have taken as his pre-booked holiday. Shah asked if he could take the "lost" holiday upon his return from sick leave. First West refused on the basis that the holiday had been pre-booked, indeed, he had been paid his full rate rather than his sickness rate during that period and, in any event, the holiday had to be taken during the previous holiday year. Since Shah returned to work in the new holiday year, they argued that he had lost his entitlement. Shah lodged a claim with the tribunal for his lost holiday.
Under the Working Time Regulations, an employee is required to take their holiday entitlement in the relevant holiday year and there is no obligation on the employer to allow for the holiday to be carried forward. However, the tribunal ruled in favour of Shah despite the fact the Working Time Regulations have not been formally amended.
As a first instance decision, this case is not binding on other tribunals. However, it could indicate that the tribunals will follow the ECJ decision in Pereda even though the Working Time Regulations have not been amended. Consideration should be given to any requests from employees to take annual leave that they were unable to take in previous years, upon their return to work. As to whether an employee is genuinely sick whilst on holiday, practical steps would include strictly enforcing any notification of absence requirements, insistence on medical examination, possibly by an employer appointed specialist, etc. preferably all set out in a well-drafted policy.