Sood Enterprises Ltd v Healy

What happened?

A handyman and car wash worker worked for a company for a number of years until he suffered a stroke in July 2010. He was then on sickness absence until he resigned in June 2011. He was entitled to 28 days’ statutory annual holiday and his sickness absence had spanned across two leave years. On the termination of his employment he was not paid in lieu for the leave that he had been unable to take during these two leave years due to his sickness. He claimed unlawful deduction of wages for all the holiday accrued during this period, including the additional 1.6 weeks statutory leave, provided for under the UK Working Time Regulations.

The Hearings

The Employment Appeal Tribunal held that the employer was not required to allow the additional 1.6 weeks to be carried over or replaced with payment in lieu on termination. Employers are required to permit employees to carry over the four weeks’ annual leave provided for under the EU Working Time Directive (WTD) where employees have been unable to take this due to sickness. Such carry over is subject to agreement between the employer and employee. In this case there was no relevant agreement, and the employee was not entitled to payment in lieu of the additional leave accrued during his absence. The EAT ordered that his payment therefore be deducted accordingly.

Take-away points

• Additional leave cannot be carried over without a relevant agreement between employer and employee.
• The UK Working Time Regulations (WTR) provide for an additional 1.6 weeks’ paid annual leave, making employees entitled to 5.6 weeks’ leave in total.
• It is crucial that you have an accurate and up to date absence management policy in place.

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