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New ruling that the long-term sick can carry forward holiday automatically

In July 2012, the Court of Appeal made a decision on an important sick-leave case. It ruled that an employee on long-term sick leave is entitled to carry holiday leave forward to the next year, even if no specific request had been made to do so.

The ruling has resolved two conflicting decisions made by the Employment Appeal Tribunal (EAT) in 2011 concerning the need to submit a request for leave to be carried forward.

The implications of the Court's decision could be costly for employers. On termination of employment, an employee who has been on long-term sick leave must be automatically paid for all the holiday that has been accrued over that period, whether or not a request had been made to carry it over.

Chris Wellham of Hogan Lovells said that an employee who has been absent for two years' leave could be entitled to claim nearly three months' pay when their employment terminates.

Legal commentators have welcomed the clarity the ruling has given, but have warned that the extra cost implication will make it more likely that employers will seek to dismiss rather than let holiday entitlement build up over long periods.

Acas provides extensive advice and guidance on Holidays and leave including the Advice leaflet - Holidays and holiday pay and the Advisory booklet - Managing attendance and employee turnover. Acas also offers training courses on managing employee holidays and leave and on New employment law and updates.

Visit the Acas Training and Business Solutions area for more information.

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