Accruing Holiday Entitlement

There has been much speculation in recent years about holiday entitlement and holiday pay. The law states that full time employees are entitled to 28 days paid leave each year (pro rata for part time workers) and that this leave must be taken in the leave year in which it is accrued, i.e. it cannot be carried over from one holiday year to the next. But what happens when an employee is unable to take paid holiday, because they are on sick leave or maternity leave for example?

In the case of Plumb v Duncan Print Group Ltd, Mr Plumb had been on sick leave from April 2010 because of an accident. When his employment terminated in February 2014, his employers agreed to pay him in lieu of his accrued but untaken annual leave for 2013/2014 but not for the years prior to this, ie 2010 - 2012.  Mr Plumb therefore brought a claim for unpaid holiday pay for these years.

At first instance, the Employment Tribunal found that, in spite of his illness, Mr Plumb could have requested and taken holiday during this period therefore his entitlement had been lost and his claim failed. Mr Plumb appealed. The Employment Appeal Tribunal (EAT) found that this was an error of law. It concluded that employees are not required to show they were physically or mentally unable to take the leave during the relevant leave yet but did not accept that the leave could be carried over indefinitely. It felt it was right to impose a limit on the amount of time leave could be carried over for, and that 18 months from the end of the leave year in which the holiday entitlement accrued was a sensible period. Mr Plumb was, therefore, entitled to his accrued but untaken leave for the holiday year 2012/2013, but no earlier.

Although the case imposes limits on the amount of holiday employees on long term sick leave can recover, this case offers much needed clarity in what is a complicated area of law. However, the EAT gave both parties leave to appeal so watch this space for any further developments.

Debbie Sadler

Published on 09/07/2015