Holiday allowance can be carried over where employees are unable to take annual leave because of reasons beyond their control.
An Employment Appeal Tribunal (EAT) found in NHS v Larner in 2012 established that employees can take holiday at a later date because of sickness, but in The Sash Window Workshop v King, the EAT has ruled that this principle can apply for other reasons.
The claimant was a commission-only salesman who worked for the employer from 1999 until his dismissal in 2012. He had taken time away from work each year, but was not paid for any holiday. He claimed that he would have taken more time off had it not been for three factors:
- He had to give notice to ensure there were not too many salesman away at one time.
- If he did not work he did not get commission.
- He was unaware of his entitlement to holiday pay.
A tribunal first found that he was entitled to bring a complaint of unpaid holiday pay for the whole period of his employment as an unlawful deductions from wages claim on a continuing basis.
The EAT allowed the appeal, concluding that the tribunal had not asked the essential question of whether the claimant had been prevented by circumstances beyond his control from taking paid leave; it had merely assumed that he was unable to take it because it would have been refused by the employer if he had asked for it.
The EAT also held that the claim was one for damages for refusal to allow the employee to exercise his right to annual leave, not an unlawful deductions for wages claim based on non-payment of holiday pay.
Elizabeth Slattery, a partner at Hogan Lovells, said: “The novel issue in the case is the EAT’s apparent acceptance of the tribunal’s finding that the carry forward of holiday could potentially apply in non-sickness cases.
“The effect of NHS v Larner was to require words to be read into the Working Time Regulations to disapply the ’use it or lose it’ presumption in sickness absence cases, with the result that unused leave cannot be carried forward ’save where the worker was unable or unwilling to take it because he was on sick leave’.
“The Sash Window Workshop Ltd v King suggests that this could be drawn more widely to read unable or unwilling ‘because of reasons beyond his control’.”