Holidays

The House of Lords, following a decision of the ECJ, held that the right to paid statutory holiday does accrue during periods of sickness absence and an allowance in lieu of such holiday is payable on termination.

Although government guidance states that rolled-up holiday pay (RHP) is unlawful, the EAT has said that if RHP is paid (which it recognised it should not be), the amount paid can be offset against any other holiday pay that may be due so the RHP could completely extinguish any right to holiday pay at the time holiday is taken.

Rolled-up holiday pay is not lawful in any circumstances according to the European Court of Justice. But, seemingly undermining its own decision, the court also said that there is nothing wrong in principle with requiring a worker to give credit for any accrued holiday pay he has already received under such a scheme.