Tribunal awards holiday pay in respect of 15-month sickness absence
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7.5.2010 In Rawlings v The Direct Garage Door Company Ltd, an employment judge held that a worker who had been on sick leave for the last 15 months of his employment was entitled to statutory holiday pay in respect of that period. The non-payment of holiday pay amounted to an unlawful deduction from wages contrary to the Employment Rights Act 1996, even though the worker had not actually taken statutory holiday during the period in question. The Working Time Directive (“Directive”) provides that member states must ensure that every worker is entitled to paid annual leave of at least four weeks. This is implemented in Great Britain by the Working Time Regulations 1998 (“WTR”), which gives workers the right to 5.6 weeks' paid leave per year. The WTR state that the first four weeks' statutory holiday may only be taken in the leave year in respect of which it is due but that the additional statutory leave of 1.6 weeks may be carried forward into the next leave year, as long as there is a relevant agreement in place confirming this. No statutory holiday (including the additional statutory leave) may be replaced by a payment in lieu, except on termination of employment. There has been a lot of debate about the relationship between statutory holiday under the WTR and sickness absence. The ECJ and the House of Lords dealt with some of the key issues last year in the high-profile Stringer case. In the House of Lords case of HM Revenue & Customs v Stringer and others, it was decided that to give effect to the ECJ's decision in the same case, the WTR must be interpreted as allowing workers on long-term sick leave to take (and be paid in respect of) their statutory holiday entitlement. On a separate point, the House of Lords held that workers can bring claims for unpaid statutory holiday not only under regulation 30 of the WTR, but also under the deduction from wages provisions of the Employment Rights Act 1996. The Rawlings case was stayed, pending the outcome of the Stringer litigation. Mr Rawlings was employed by The Direct Garage Door Company Ltd (DGD). DGD's holiday year ran from 1 January to 31 December. Mr Rawlings was absent due to illness throughout 2005 and remained so until 5 April 2006 when his employment terminated. The judge upheld Mr Rawlings' unlawful deduction from wages claim for holiday pay in respect of both 2005 and 2006. The judge stated that it is clear, from the decision in Stringer, that the WTR "do not properly implement the Directive in relation to paid leave entitlement in a year in which the employee is not able to take paid leave". The judge noted, however, that the House of Lords in Stringer had held that an unauthorised deductions claim could be made in relation to the accrued holiday pay entitlement. This, in the employment judge's view, was the only way in which the Directive could be properly implemented. Mr Rawlings was "unable to take leave due to illness throughout 2005 and 2006". In these circumstances, he was entitled to four weeks' holiday pay for 2005 and a proportion of that for 2006.
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