What is the legal development?

The Working Time Regulations require employees to take statutory holiday in the year in which it accrues (and not to carry it over). Case law has made an exception for employees who are ‘unable or unwilling’ to take their paid holiday during a period of sickness absence, but what does that mean, and for how long can they do so?

We have some further clarity from a recent EAT case stating that employees on sick leave:

1) cannot be required to take holiday if they do not wish to take it, and nor do they need to show that they were unable to take the holiday whilst off sick – they can simply choose not to do so; and

2) must take any accrued statutory holiday (the four weeks under the Directive) within 18 months of the end of the leave year in which it accrued.  It cannot be carried forwards indefinitely.

What does this mean in practice for employers?

Statutory holiday entitlement accrues during long term sick leave, whatever the reason for not taking it, and can be carried forward. The ongoing liability is a reminder of the need to proactively manage sickness absence at an early stage (and indeed risks of disability discrimination claims would encourage this).  Sickness and holiday policies may also need reviewing.