Workers continue to accrue statutory holiday when they are absent … on holiday, on sick leave, on maternity leave, for whatever reason … so long as the employment contract is still in place.
Extended sick leave
Recently, the House of Lords (in HMRC v Stringer) has decided that an individual whose employment ended after a substantial period of sick leave was entitled to be paid for accrued but untaken WTR holiday, even if it went back earlier than the start of the holiday year. This is a dynamic area of employment law, and you should check before calculating the final payment of anyone dismissed during a long term absence.
Sickness on pre-booked leave
Some employers have agreements that provide for sickness to ‘trump’ holiday and for annual leave to be refunded. Most employers do not. The default is – that the holiday had been booked and taken, and whether the individual was sick made no difference. It can surely only be a question of time before someone challenges this, and says they need their full statutory holiday entitlement some other time when they are not ill!
Individuals on all forms of family absence continue to accrue leave while they are off.
Women on maternity leave must be permitted to take their annual holiday entitlement in a period other than their maternity leave, or to carry it forward into a later year (or payment if they do not return).
Holiday is pay
Accrued statutory holiday is pay and thus cannot be forfeit when an individual is summarily dismissed for gross misconduct. Additional contractual pay can be treated differently.
Any non-payment of holiday pay can be claimed via a tribunal as a non payment of wages.
Any reduction in contractual holiday can only be made with consent. Agreements attempting to reduce holiday below the statutory minimum have no effect. Employees can still insist upon their basic paid holiday.