• Employees on Long Term Sick Must Claim Holiday in order to be Paid

    In Fraser v Southwest London St George’s Mental Health Trust the EAT has held that an employee on long-term sick leave must request annual leave in accordance with Reg 15 of the Working Time Regulations 1998 to be entitled to payment for it. Mr Justice Underhill, President of the EAT, considered this conclusion to be compatible with European law. His judgment cuts through a line of inconsistent domestic case law and holds that List Design Group Ltd v Douglas and ors (Brief 726) and Canada Life Ltd v Gray and anor (Brief 754) were wrongly decided.

    F, a nurse, injured her knee in an accident at work in November 2005. She went off on long-term sick leave and her entitlement to sick pay expired in August 2006. In November 2007 she was certified fit for a limited return to work and the Trust resumed paying her from that date but it did not prove possible to find her work. The Trust ceased paying her again in March 2008 and dismissed her later that year. It paid her in lieu of untaken leave accrued in the final leave year, which began in April 2008, but nothing in respect of the two previous leave years, during substantial parts of which she had been receiving no pay at all.

    F brought a tribunal claim seeking payment in respect of four weeks’ leave for each of those two years. There was no dispute that she had accrued leave in those years but the tribunal found that she had to trigger the entitlement to be paid for it by giving notice under Reg 15, which she had not done. It noted that nothing in Stringer and ors v Revenue and Customs Commissioners and another case (Brief 871) suggested that Reg 15 should not apply to workers who are off sick. F had not shown any evidence that she was unable to take leave during her sickness. F appealed.

    On appeal, F submitted that following List Design, as endorsed by Canada Life, the fact that she had not formally ‘taken’ her leave by serving notice did not matter. Underhill P noted that he should not depart from Canada Life unless he were satisfied that it was clearly wrong. He concluded that it was. In his view, the earlier EAT decision Kigass Aero Components Ltd v Brown (Brief 706) was plainly right that payment for annual leave under Reg 16 only arises in respect of leave actually taken. The fact here was that F did not take any holiday during the years in question. The ordinary rule is ‘use it or lose it’ and neither the wording nor purpose of Reg 14 (which gives a right on termination to pay in lieu of untaken leave) requires the revival of claims for holiday entitlement not taken in previous years. Underhill P noted that it might appear somewhat artificial for an employee who is not at work to have to give notice that part of her absence should count as holiday, but thought that merely reflected the artificiality of a period of long-term sickness counting as holiday at all.

    Having considered the European authorities, particularly Pereda v Madrid Moviidad SA (Brief 887), Underhill P was satisfied that his conclusion was consistent with them. He thought it clear from Pereda that an employee on sick leave may choose to take annual leave during that absence or ask for it to be deferred until a later period. But it is for the employee to ask. If F had requested to take leave following her recovery, the Trust might have been obliged to accede to that request, and if she had not had the chance to take it before her termination supervened, Reg 14 might need to be construed as entitling her to a payment in lieu. But that was not what happened.

    Underhill P briefly considered the merits of F’s alternative argument that the Trust was under an implied contractual duty to inform her of her right to request leave while absent sick. F relied on the House of Lords’ decision in Scally and others v Southern Health and Social Services Board and ors, which implied a duty on the employer to inform employees of a contractual benefit that the employee could not reasonably have been expected to know about. Underhill P held that Scally was distinguishable on the basis that it invoved a collectively-negotiated contract. In his view, absent particular circumstances, there can be no duty on an employer to advise his employees of their rights that arise instead as a matter of general law.

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