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Law for Business

Knowhow - guidance - precedents

11 SEP 2012

Accruing holiday during sickness

Following on from cases on the topic in the Court of Justice of the European Union (CJEU), two recent cases have looked at accrual of holiday pay and sickness.

In Fraser v Southwest London St George's Mental Health Trust, the EAT looked at whether sick workers can claim holiday pay under the Working Time Regulations if they had not informed their employer they intended to take leave, while the CJEU looked at the lawfulness of limiting carry-over of holiday into future holiday years.

Ms Fraser was an employee who had been injured and off work for some four years before she was dismissed. She had not been paid for the final two years, and tried to claim outstanding holiday pay for those two years. The EAT agreed that Ms Fraser had accrued holiday throughout the time that she was off sick but held that, in order to be entitled to claim holiday pay, she needed to have taken the leave and done so in accordance with the notification requirements in the Working Time Regulations. This would have included telling her employer when she was taking the leave. As Ms Fraser had not done so, her claim failed.

In KHS AG v Schulte, the CJEU held that a German national law, which limited the extent to which employees could carry forward holiday entitlement before losing it, was lawful and not incompatible with the Working Time Directive. The CJEU considered that holiday should be a rest from the stresses and effort of work rather than simply a period of relaxation and leisure. However, the CJEU went on to hold that any carry-over limit must be substantially longer than the holiday reference period and suggested that a carry-over period of only six months would not be enough. It is likely that a period of less than the 15-month allowed by German law will contravene the Directive.

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