Wise Observer

Employers and workers alike are awaiting the House of Lords’ decision in the seminal case of Stringer v. HMRC, which will conclusively establish whether employees can continue to accrue annual holidays while they are on sick leave, and whether they can take further annual leave while on sick leave. UK law is currently interpreted to disallow employees from carrying forward unused leave from year to year, and from availing of annual leave while on sick leave.

Four erstwhile employees of HMRC began this long-running legal battle when they filed suit against the company - three of them for refusal to pay cash in lieu of unused holidays on termination while on sick leave, and one for refusal to allow him to take annual leave while on sick leave.

The case was heard by an Employment Tribunal and then by the Court of Appeal, both of which decided in HMRC’s favour. However, when it went to the European Court of Justice in January, it was held that the lower courts had incorrectly interpreted the relevant Regulations. The Court laid down a number of rules:

- Annual leave is independent of and unaffected by sick leave, if any, taken by a worker. Employees are entitled to four weeks’ annual leave each year, which can be carried forward if not availed at the end of a year;

- Employees have a right to take this leave upon return to work after sick leave;

- Upon termination, all unused leave is to be compensated for in cash payments; and

- Employers are to deal with not only contractual benefits such as sick leave, maternity benefits etc., but also with additional leave available to the employee under the Regulations.

The case has since then reached the House of Lords, from which a decision is soon expected. Make sure your organisation get-to-grips with the key issues that impact on employment practice, click on Employment Law for CIPD courses run by the trainers and consultants at Workplace Law who have practical experience in the workplace as well as sound legal knowledge.