Helm News: Holiday Pay

Until recently there has been uncertainty as to whether workers can accrue and take paid holiday whilst absent from work on long-term sick leave. In January 2009 the European Court of Justice made a ruling on holiday pay in the case of Stringer v HMRC. This ruled that employees will continue to accrue the right to 4 weeks paid holiday during any period of sickness absence and that they must be allowed to take this holiday on their return to work or receive payment in lieu at the end of their employment. A claim may be backdated to 1998, which is the date the Working Time Regulations took effect.

Since this initial ruling there has been some case law, but no definitive answers. The most recent case being NHS Leeds v Larner which ruled that Larner was entitled to carry untaken paid holiday entitlement forward to the next holiday year without making a prior request to do so, which has been upheld by the Court of Appeal.

Employers need to carefully consider how they approach the treatment of holiday pay for employees on long term sick leave. Should you wish to discuss your options, please contact Helm Godfrey.

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