Holiday Pay – Carrying over entitlement to the next year

legal updates

If an employee is on long term sick, they are entitled to carry any untaken holiday, whether they were able to take it or not, for a period of 18 months.

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There has been a new ruling from the Appeal Tribunal, which seems finally to have given us some clarity on this matter.

If an employee is on long term sick, they are entitled to carry any untaken holiday, whether they were able to take it or not, for a period of 18 months. This timeframe commences from the date at which the first leave ends, i.e. the year in which the leave was accrued but not taken. The Tribunal has given leave for the matter to be appealed however as yet this has not occurred and as such it should be deemed to be a valid decision.

Employers must therefore take care when making final payments to employees on long term sickness, to ensure that all holiday pay is correctly accounted for. Further, it is something for employers to take into consideration, when looking at when to commence a capability assessment on a long term sickness matter. It could become very costly if you leave a member of staff on long term sick for too long.

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