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Employees on sick leave and carrying over holiday entitlement

According to a recent Employment Appeal Tribunal decision, workers on sick leave can carry over any unused holiday allowance into a subsequent holiday year without being required to prove that they are physically unable to take it within the existing holiday year. This interpretation makes it sufficient that an employee is absent on sick leave and merely doesn’t want to take annual leave during their absence.

Limits to carrying over holiday entitlement

However, the right to carry over holiday is not unlimited. The EAT also held that the Working Time Regulations should be interpreted as permitting a worker to take holiday entitlement within 18 months of the holiday year in which it accrues if they are unable (or unwilling) to take it because they are on sick leave, but that any accrued holiday which goes beyond that 18 month cut-off is lost.

Other key employer obligations under the Working Time Regulations

  • Employers should be aware of their other key obligations under the Regulations, which include:
  • Taking all reasonable steps to ensure that workers’ average working times, including overtime, do not exceed 48 hours per week (unless a worker has opted-out)
  • Special safety measures for night shift workers (including the right to free health assessments)
  • Adequate rest breaks (a rest of 20 minutes when working more than six hours each day)
  • Paid holiday (a minimum of 28 days per year including Bank Holidays for a full time worker)
  • Keeping accurate and sufficient records

Penalties for an employer in breach of the Working Time Regulations

Depending on the severity of the breach, the potential penalties for an offending employer include:

  • Unlimited fines
  • Criminal indictment
  • Notices issued by the Health and Safety Executive
  • Compensation (payable to workers in an employment tribunal)

Practical steps businesses should consider under the Working Time Regulations

Employers should consider taking the below steps in compliance with the Regulations:

  1. Agree with workers what ‘working time’ actually means
  2. Identify which (if any) workers are likely to exceed 48 weekly hours on average and enter into an opt-out agreement with them
  3. Ask workers who have not opted out for details of any other work they do for another employer and the hours they work each week
  4. Keep accurate employee records and a specific list of workers who have opted-out.

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