NHS Leeds v Larner

A worker absent through sickness for the whole of a leave year does not lose accrued paid annual leave merely because no request to take or carry it forward was made before the year ended. Such absence means that the worker is presumed not to have had the opportunity to enjoy the leave. The entitlement therefore carries forward without a formal request, and payment crystallises when employment terminates.

Where a worker has given notice under regulation 15 of the Working Time Regulations 1998, and the employer gives no valid counter-notice, the right to take paid leave at the specified time crystallises.

The respondent was employed by the appellant and was absent through sickness from 5 January 2009 until her dismissal on grounds of incapacity in April 2010. She had made no requests to take annual leave during the 2009–2010 leave year.

The Employment Tribunal held that she remained entitled to payment for accrued statutory leave which she had been unable to take. The appellant appealed, arguing that the entitlement had expired because no notice had been given under regulation 15 of the Working Time Regulations 1998. The central issue was whether a worker absent through sickness for the whole leave year had to request leave or its carry-forward before the year ended.

1. Appeal dismissed. The Employment Tribunal was right to find that the respondent was entitled to payment for annual leave which she had no opportunity to take during the 2009–2010 leave year.
2. Regulation 16 payment depends on an extant entitlement to leave under regulations 13 and 13A. The statutory entitlement to four weeks’ leave, increased to 28 days by regulation 13A, is subject to regulation 13(9), including the rule that leave is ordinarily taken in the leave year and cannot be replaced by payment except on termination.
3. The court accepted the effect of Stringer and Pereda: annual leave accrues during sickness, and a worker absent through sickness for the whole leave year is presumed not to have had the opportunity to exercise the right to enjoy a period of relaxation and leisure. The leave entitlement therefore carries forward without a formal request. Payment crystallised on termination.
4. Regulation 15 governs the exercise of leave, rather than extinguishing the underlying entitlement in the circumstances considered. If compliant notice is given and the employer gives no valid counter-notice, the right to take paid leave at the specified time crystallises. The court rejected an interpretation which would make an agreed short-notice holiday incapable of being statutory annual leave.
5. The position may differ for a fit worker who has had the opportunity to take leave but makes no request during the leave year. The claim concerning untaken leave from 2008–2009 was treated as withdrawn.

• Employment Tribunal: held that the respondent was entitled to payment for accrued annual leave which she had been unable to take.
• Employment Appeal Tribunal: dismissed the appeal and upheld that finding. The separate claim concerning leave from 2008–2009 was treated as withdrawn.