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Holiday Pay when Sick

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Employers commonly ask whether it is mandatory to pay holiday pay under the WTR 1998 to an employee who is on long-term sick (and either receiving just SSP or nothing at all).

An robust answer has now been provided, albeit at 1st-instance only (Birmingham ET, Brown v Kigass Aero Components Ltd). According to the tribunal, the WTR impose an obligation to pay 4-weeks holiday pay (or, as it was then, 3 weeks) irrespective of whether the employee is working or not. Thus an employer who does not pay a normal salary to a long-term sick employee must still pay the 4-week statutory holiday entitlement.

The tribunal placed weight on the practical problems flowing from a finding in favour of the employer. Should an employee who has been absent from work for one month suffer a reduction in holiday entitlement of one-twelfth? On the basis this ran against the natural wording of the Regulations (as was conceded by the employer), the tribunal saw no difference in principle between a one-month absence and a 12-month (or longer) period of absence.