Legal Updates
The effect of illness during a holiday
In Shah v First West Yorkshire a tribunal has decided that a worker whose pre-arranged holiday coincided with a period of sick leave should be allowed to carry forward the period of "lost" annual leave entitlement to the following holiday year. As the Working Time Regulations prohibit the carry forward of leave from one year to the next, the tribunal reached its decision by inserting additional wording into the Regulations. This is the first tribunal decision giving effect to the European Court of Justice decision of Pereda v Madrid Movilidad, which we reviewed in our September 2009 e-bulletin.
Mr Shah had booked 4 weeks' holiday (as he worked a 3 day week this amounted to 12 days' annual leave) but broke his ankle shortly before the holiday and was absent from work for 3 months. His sickness absence, therefore, overlapped with his booked period of holiday. First West Yorkshire refused to allow Mr Shah to reclaim the 12 days' holiday on the basis that they related to a previous holiday year and had therefore been "lost". Mr Shah brought a claim for breach of the Working Time Regulations.
The tribunal considered the conflict between the Working Time Regulations and the Pereda decision:
- The Working Time Directive provides that workers are entitled to 4 weeks' paid annual leave. The Working Time Regulations do not permit these 4 weeks to be carried forward to the next holiday year if they are unused for any reason (the additional 1.6 weeks provided for in the Regulations can, however, be carried forward with agreement);
- In Pereda v Madrid Movilidad, the European Court of Justice made it clear that a worker who is ill or injured during a period of previously scheduled statutory holiday has the right to take the holiday at a later date. If the worker remains absent on sick leave to the end of the holiday year, the worker should be allowed to take the "lost" holidays in the next holiday year.
The tribunal considered that the purpose of the Working Time Regulations is to give workers paid periods of leisure regularly throughout the working year in order to protect their health. Where a worker falls ill on holiday, they cannot then take "their leisure". The tribunal decided that it was consistent with the "thrust" of the Regulations to insert additional wording to allow Mr Shah to take the holidays he could not take due to ill-health in the following leave year.
Although Shah is only a decision at tribunal level, and is therefore not binding on other tribunals, as it follows ECJ authority and is consistent with the terms of amended government guidance on the interaction of annual leave and sick leave*, we think it is likely to be followed. The government proposes to consult on amendments to the Working Time Regulations later this year.
The impact of the Pereda decision was immediate for employers in the public sector but not for those in the private sector. Following Shah, all employers should allow a request to take a period of holiday at a later date in these circumstances. Employers may also want to consider the terms of their absence policies.
When considering requests/policies employers should:
- Remember that the Pereda and Shah rulings relate to the 4 weeks' annual leave granted in terms of the Directive only. There is currently no obligation to reschedule or carry forward the additional 1.6 weeks. It may not be practical, however, to treat the 4 week period and the additional 1.6 week period separately.
- The chance and cost of workers abusing the right to reinstate holidays is less where workers are only entitled to statutory sick pay. The three day waiting period and the low value of SSP make the option of substituting sickness absence for paid holiday less attractive.
- Where contractual sick pay is provided, to prevent abuse employers should consider imposing a requirement for medical certificates to be submitted for any period of sickness while on holiday.
- Workers making requests to take holidays at a later date due to sickness should be treated consistently and employers should be able to justify any refusal.
Shah v First West Yorkshire Limited 1809311/2009
For those who are interested.....The impact of European directives and case law
The fact that the tribunal inserted additional wording into the Working Time Regulations to comply with the Pereda decision is interesting. It is an approach which was also followed in Attridge Law v Coleman (No 2) UKEAT/0071/09 where the EAT read additional words into the Disability Discrimination Act 1995 to provide protection against associative discrimination. These decisions are a reminder of the lengths to which courts and tribunals must go in interpreting domestic legislation in light of a European directive or case law. This approach is not limited to the employment field. UK courts have inserted their own wording into UK statutes in other areas of the law, such as procurement.
In practice, it means that employees in the private sector do not necessarily have to wait for the Government to amend legislation which is found to be inconsistent with European law: tribunals can add wording where necessary, provided that it is consistent with the general scheme and aims of the existing domestic provisions.
This material is for information purposes only and does not constitute any form of advice or recommendation by us. You should not rely upon it in making any decisions or taking or refraining from taking any action. If you would like us to advise you on any of the matters covered in this material, please contact one of the lawyers named above.
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