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Inland Revenue Commissioners v. Ainsworth & Ors



The appellant Inland Revenue appealed against a decision that employees absent from work for a substantial period of time as a result of ill health were nevertheless entitled to holiday pay under the Working Time Regulations 1998. The respondent employees (E) had remained absent from work on health grounds until after any entitlement to statutory or contractual sick pay had been exhausted. With one exception, E's employment had eventually been terminated on grounds of ill health. E made claims for holiday pay on the basis that they had been entitled to receive it under the 1998 Regulations for as long as their employment had subsisted even though they had been absent from work. E submitted that their cases were covered by Kigass Aero Components Ltd v Brown; Taree v Bold Transmission Parts Ltd; Macredie v Thrapston Garage (2002) ICR 697 which decided that employees who were away from work on long term sick leave and who were no longer receiving any pay were nevertheless entitled to claim holiday pay under the Regulations. The Inland Revenue submitted that Kigass was wrongly decided and that a claim for holiday pay could only be brought under reg.30 of the Regulations and not as a claim for unauthorised deductions from wages under the Employment Rights Act 1996 Part II.

HELD: (1) Considering the context and purpose of the Regulations, the court accepted the Inland Revenue's submission that employees who were absent from work on long term sick leave could not take "annual leave" within the meaning of reg.13 of the Regulations. A worker on long term sick leave was not entitled under reg.13 to four weeks' annual leave in a year when he had not been able to attend for work, Kigass Aero Components Ltd v Brown; Taree v Bold Transmission Parts Ltd; Macredie v Thrapston Garage (2002) ICR 697 overruled. Similar considerations applied to those who claimed under reg.14 after their employment had been terminated. If possible reg.14 should be construed consistently with reg.13 and if reg.13 would have provided a worker with a nil entitlement prior to termination then the reg.14 entitlement on termination was also nil. The court rejected E's submission that in the reg.14 formula "the period of leave to which the worker was entitled under regulation 13" would always be four weeks except in first leave year cases. (2) The Working Time Regulations were intended to provide a single and exclusive regime for the enforcement of the new statutory rights and it could not have been intended that the regime under reg.30 should be capable of being circumvented by an application under the 1996 Act, List Design Group Ltd v Douglas (2002) ICR 686 and Canada Life Ltd v Gray (2004) ICR 673 overruled.
Appeals allowed.
For the appellants: Nicholas Underhill QC, Adam Tolley
For the respondents: Michael Ford
For the appellants: Solicitor for Inland Revenue
For the respondents: Thompsons

LTL 22/4/2005 : (2005) IRLR 465 : Times, May 16, 2005

Document No. AC0108681

[2005] EWCA Civ 441 : [2005] IRLR 465 : Times, May 16, 2005

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