Holiday Pay Carry Over

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Whilst full time employees in the UK are allowed under the Working Time Regulations 1998 a minimum of 5.6 weeks holiday per holiday year, only 4 weeks of that entitlement may be carried over to the following year.

In the case of Snood Enterprises v Healy the employee Mr Healy resigned his position after being on long term sick leave for 13 months. He claimed payment in lieu of accrued, but untaken holiday for the period of the 2 holiday periods.

The Employment Appeal Tribunal followed European and UK case law by affirming that an employee on long term sick leave is allowed to automatically carry over the ‘basic allowanceâ? of four weeks annual leave that is guaranteed under the European Directive.  However, it also held that the ‘additional allowanceâ? of 1.6 weeks annual leave provided under the Working Time Regulations cannot be carried over, unless the parties have an agreement to do so.  The agreement being contained within an employee’s contract of employment, holiday or absence policies or within an employee handbook.

Unfortunately for Mr Healy, there was no such agreement in place between him and his employer.  Therefore he was only entitled to carry over and claim payment for the ‘basic allowanceâ? of four weeks per leave year, less any holiday taken prior to his period of sick leave.

What does this mean for an employer?

Employers with employees on long term sick leave should:

  • Consider whether there is an agreement in place whereby employees on long term sick leave can automatically carry over the ‘additionalâ? 1.6 weeks’ annual leave.
  • Consider whether to allow, should there be no agreement in place, employees on long term sick leave to automatically carry over the ‘additionalâ? 1.6 weeks’ annual leave.
  • Ensure the correct number of day’s holiday are either carried over or paid for where an employee is on long term sickness absence and where there is no agreement in place.  The entitlement is only for 4 weeks to be carried over not 5.6 weeks.
  • Ensure employees are aware of company policy on the carryover of holidays when they are on long term sick leave.

Contact Farnworth Rose

To receive free initial advice on your rights in relation to your holiday pay, or your employees holiday pay, contact us on 01282 695 400 or simply complete our quick online contact form and we will be in touch with you shortly.