Sood Enterprises Ltd v Healy

Where a worker has been prevented by sickness from taking the four weeks’ annual leave protected by Article 7, the Working Time Regulations 1998 must, so far as possible, be interpreted to permit carry-over and payment in lieu on termination. That conforming interpretation applies in a dispute with a private employer. It does not require the worker to have made a prior request for leave or carry-over while sickness prevented the leave from being taken.

The additional annual leave under regulation 13A has a different statutory basis. In the absence of a relevant agreement, regulation 13A(7) prevents its carry-over. Its character as wages does not determine whether it may be carried forward. On termination during the current leave year, however, the statutory payment calculation includes leave under both regulations 13 and 13A.

The claimant, a car-wash worker and handyman, was absent through illness from July 2010 until he resigned on 6 June 2011. He had taken 11 of his 28 days’ leave in 2010. The Employment Tribunal held that he was entitled to payment for the remaining 17 days in 2010 and for 14 pro-rated days in 2011.

The employer appealed. It contended that the Working Time Directive could not assist a worker against a private company, that a request for carry-over was necessary, and that only the four weeks’ leave under regulation 13 could be carried over. The appeal therefore concerned accrued holiday pay during sickness, including the status of the additional leave under regulation 13A.

1. The appeal was allowed in part. The Tribunal’s award for 2011 was upheld. Its award for 2010 was reduced from payment for 17 days to payment for nine days.

2. Article 7 of the Working Time Directive 2003/88/EC is directly effective only against an emanation of the state. Nevertheless, the Working Time Regulations 1998 must, so far as possible, be interpreted compatibly with the Directive, including in litigation between private parties. Following NHS Leeds v Larner [2012] EWCA Civ 1304, regulation 13(9) is to be read as permitting carry-over where sickness prevented the worker from taking the leave. Regulation 14 is correspondingly read to require payment in lieu on termination for that carried-over leave.

3. A worker prevented by sickness from taking annual leave is not required to give notice or make a request for leave or carry-over during the sickness absence. The claimant therefore retained his regulation 13 entitlement for 2010 despite making no request in that leave year.

4. The additional leave under regulation 13A is different. Article 7 does not require national law to provide payment in lieu for leave exceeding its four-week minimum. Regulation 13A(7) permits carry-over only where a relevant agreement provides for it. No such agreement was found. Payment for regulation 13A leave may be wages, but that classification does not answer whether it can be carried forward.

5. Accordingly, for 2010 the claimant could carry forward only the 20 days under regulation 13. Having taken 11 days, he was entitled to payment for nine days, namely £384.30. For 2011, termination occurred within the current leave year. Regulations 14 and 16 included both regulations 13 and 13A leave, so the agreed pro-rated award for 14 days was correct.

• Employment Appeal Tribunal: Allowed the employer’s appeal in part and substituted £384.30 for the Employment Tribunal’s 2010 holiday-pay award.
• Employment Tribunal: In November 2011, awarded holiday pay for 17 untaken days in 2010 and 14 pro-rated days in 2011.