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Holiday pay whilst on sick leave - the saga continues

10 November 2010 #Employment

In Souter v Royal College of Nursing Scotland ETS/106313/10 the Scottish ET considered the issue of whether an employee was entitled to payment for previous annual leave years on the termination of her employment. It also considered the relationship between PHI and holiday entitlement.
The ET held that Mrs Souter`s claim failed because:

  • Her claim was out of time. On the termination of her employment, she was paid in respect of her untaken holiday entitlement for 2010, her final leave year. Therefore, even if her employer had made previous unlawful deductions in respect of statutory holiday pay, the last in that series occurred on 31 December 2009. As the claim was filed outside of the three month time limit after that date, it  was out of time under section 23 of the ERA 1996.
  • Untaken leave entitlement does not roll over. As regulation 13(9)(a) of the WTR prevents workers carrying over untaken leave from one year to the next, Mrs Souter`s unused holiday entitlement was wiped out at the end of each leave year and as such she had no outstanding holiday entitlement for the period from 2001 to 2009. 
  • Mrs Souter had suffered no financial loss in respect of holiday pay from when she received PHI. When Mrs Souter started to receive her PHI benefits, there was a permanent arrangement that she would not be able to come back to work. Her contract was effectively varied to provide for a lower "salary" level financed by the PHI insurers. Mrs Souter received this lower salary level each week regardless of whether she took holiday or not and so suffered no loss.
Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.
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