Employees on sick leave entitled to carry over annual leave

Employees on sick leave entitled to carry over annual leave

Ogier has taken a test case to the Employment Tribunal to clarify the law on annual leave entitlement for employees on long term sick leave. 

In a judgment released earlier this month the Tribunal held that staff who are unable to take statutory annual leave due to serious ill health are entitled to carry over that leave to the next holiday year. 

The facts

The applicant was employed by Ogier in the compliance department.  In March 2011 the applicant was signed off sick due to an operation.  She remained on fully paid sick leave until September 2011.  In September 2011 the applicant did discuss the possibility of being fit to return to work, but was deemed not to be well enough to return by her GP, and therefore she remained off work until the following January and received 75% of her salary under the firm's permanent health insurance policy.

In January 2012 the applicant advised she was well enough to return to work, but despite efforts by the business to get the applicant into the workplace to discuss potential work options she never actually returned.  She remained on full pay between January and March 2012, when her employment was terminated by reason of redundancy.

On termination the applicant was paid for 3 days of annual leave that she was allowed to carry over from 2011 under the terms of the Ogier staff handbook.  She was also paid in lieu for her 2012 holiday entitlement. 

The applicant claimed that because she was on sick leave she was entitled to carry over all of her untaken 2011 statutory holiday entitlement. She also claimed a day's pay for all the bank and public holidays that occurred while she was signed off work. 

Statutory right to annual leave

Articles 11 & 13 of the Employment (Jersey) Law 2003 state that an employee is entitled to two weeks paid annual leave in each leave year.  Article 14 states that in the year of termination the employer must buy out any untaken leave, or if the employee has taken too much leave the extra days must be paid back to the employer.

Employees are also entitled to leave on all public or bank holidays.  If required to work on a bank or public holiday the employee is entitled to another day off in substitution.

An employer can give more generous holiday entitlement (both in terms of the number of days and the right to carry over) but the employer cannot go below the statutory minimum.

The decision

Ogier argued that where an employee cannot take statutory holiday due to ill health the entitlement is lost at the end of the leave year.  In other words, there is a "use it or lose it" rule. 

The Tribunal disagreed and held that an employee who is unable to take holiday because of serious ill health is in the same situation as the employee who cannot take holiday because of a defiant refusal on the part of the employer. 

On the facts of this particular case the Tribunal found that the employee had not been too ill to take holiday.  She had been contemplating a partial return to work from September 2011 and was fit to return to work in January 2012.  As she had the opportunity to take her to leave before she left in March she was not entitled to be compensated for the untaken leave

In relation to bank and public holidays the Tribunal held that the applicant had already been paid for these days and she wasn't entitled to be paid again simply because she was sick.  That would have put her in a better position than her healthy colleagues. 

Discussion

The decision of the Tribunal puts employers in the difficult position of having to determine whether an employee signed off work due to ill health is too sick to take holiday. 

The question also arises as to whether employees on long term sick leave can carry over their statutory holiday entitlement for more than a year.  For example, is an employee signed off sick in 2011 entitled to carry over that year's leave and leave for 2012 into 2013?  This will be an important consideration for employers with staff on long term sick as it could generate an obligation to buy out all of the accrued leave on termination.

As Ogier won the case there is no scope for a further appeal to the Royal Court on the law.  It is possible that a differently constituted Tribunal will adopt the "use it or lose it" approach.  However, as things stand at the moment employers should make it clear to employees on long term sick that they must take their annual leave entitlement if they are well enough to do so. 

About Ogier

Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.

Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

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