Although providing a useful clarification of the Employment Rights Act 1996, s 27, this decision seems to raise more questions than it answers.

The case involves the right of workers, under regulations 13 and 14 of the Working Time Regulations 1998 (the “Regulations”), to accrue holiday and be paid in lieu of untaken holiday on termination of employment.

Mr Stringer had been on long term sick leave for about two years.  He was dismissed and claimed payment in lieu of untaken holiday accrued in the last year of his employment.  

The House of Lords decided that such claims can be brought under the Employment Rights Act 1996, and not just under the Regulations themselves. This means that workers can bring claims for unpaid holiday pay within three months of the last in a series of “deductions”, which broadens the scope to claim for unpaid holiday from previous holiday years (under the Regulations, such claims can only be brought within three months of the end of the relevant holiday year).

However, the House of Lords had referred certain questions to the European Court of Justice (“ECJ”) about how workers on long-term sick leave accrue holiday, including when they do not perform any work in the relevant holiday year. 

It was hoped that in its judgment, the House of Lords would give guidance on how the ECJ’s ruling should be applied in the UK. Unfortunately, however, the House of Lords did not consider these issues and this means continuing uncertainty in this area. In particular, it remains unclear whether employers must allow workers to actually take holiday whilst on sick leave, given that the Regulations do not allow workers to carry accrued but untaken holiday forward into the next holiday year.  


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