Do I have to pay holiday pay for those who are off sick?

After many years of uncertainty, a recent ruling by the House of Lords in a case which became known as Stringer and others v HM Revenue and Customs, makes the answer to this question clearer. Firstly, annual leave continues to accrue during sick leave, so someone who is on long-term sick and has run out of sick pay, continues to clock up holiday entitlement and if their employment is ended they will be entitled to payment in lieu of that “pot” of holiday that has built up. It also means they can take holiday (at the same time they are off sick) in order to be paid for it.

What is not clear is what happens for those who don’t take or try to take the holiday - do they lose it or is the employer risking a claim? The practical answer is that until the case law resolves this you should ensure you make people take their holidays to stop a “pot” building up.

We would be happy to review your current practice for you. Please do not hesitate to contact Anna Denton-Jones on 029 20 537742 or adenton@mdjlaw.co.uk.Morgan Denton Jones LLP