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Plumb v Duncan Print Group Limited UKEAT/OO71/15/DA (j’ment 9 July 2015)


Employment Appeals Tribunal

Plumb  v Duncan Print Group Limited UKEAT/OO71/15/DA (j’ment 9 July 2015): EAT decides that the carry-over period for annual leave is subject to an 18 month temporal limit.

Stuart Brittenden appeared for the Appellant in Plumb.

1. Background: Reg 13(9) of the Working Time Regulations 1998 requires a worker to take annual leave within the leave year in respect of which it is due. This may not be replaced by a payment in lieu save where the employment is terminated. In NHS Leeds v Larner [2012] ICR 1389 CA, Reg 13(9) was found not to comply with various CJEU rulings in situations where the employment was terminated following a period of sickness absence. Regulation 13(9) had to be construed to give effect to the Directive. Where a worker was “unable or unwilling” to take their paid annual leave during a period of sickness absence, they were entitled to take their leave at a time when they were not sick. Consequently, Mummery LJ redrafted Regulation 13(9), and added a new Regulation 14(5) so as to make the Regulations compatible.

2. Larner left open the question as to whether there was any temporal limit on how much leave could be carried-over in this way.

3. Facts: The scope of Larner was considered by the EAT in Plumb. Mr Plumb worked as a printer. He suffered an accident at work in April 2010 and remained absent on certified leave until 10 February 2014 when his employment was terminated. He did not take paid annual leave for the leave years 2010, 2011, and 2012. In August 2013 he requested to take 20 days paid annual leave for each of these earlier years. This request was refused. He brought a claim for holiday pay in respect of these leave years.

4. The ET dismissed his claim. In doing so,  applying Larner, it decided a worker would have to establish that they were actually unable, by reason of their medical condition, to take their leave whilst they were on sick leave. As no medical evidence had been produced on this issue, and because Mr Plumb was able to continue working in another weekend job, his claim failed. Mr Plumb (supported by his trade union, Unite) appealed.

5. The Appeal: Two issues featured in the appeal:
    (1) Whether an employee on sick leave is required to establish that they were unable to take their annual leave by reason of their medical condition,  or was it sufficient that they were absent on sick leave and did not choose to take it during a period of sickness absence?
     (2) Is there any limitation on the period for which an employee may take unused annual leave accrued in one leave year in later years?

6. The EAT found that the ET had misapplied Larner. An employee on sick leave has a choice. They may take annual leave during a period of sickness absence, but they are not required to do so. If they do not wish to do so, they may take their annual leave at a later date. The EAT accepted the point that a person on sick leave cannot be compelled to take leave when they did not wish to take it (see Pereda v Madrid Movilidad SA [2009] IRLR 959). The EAT also found that the ET had erred in failing to consider whether Mr Plumb was ever willing to take his paid leave prior to submitting a request in the summer of 2013.

7. The EAT in Plumb provided clarification that the carry-over period is in fact subject to a temporal limit of 18 months.

8. The employer relied upon KHS AG v Winfried Schulte [2012] IRLR 156. That case concerned a provision in a German collective agreement that meant that leave could not be carried over beyond a period of 15 months after the expiry of the reference period. S suffered from a heart attack and claimed payment in lieu of annual leave for the period 2006, 2007, 2008. The CJEU dismissed his claim on the basis that his leave entitlement had lapsed. At para 44 it stated:

Consequently, the answer to the first question is that Article 7(1) of Directive 2003/88 must be interpreted as not precluding national provisions or practices, such as collective agreements, which limit, by a carry-over period of 15 months on the expiry of which the right to paid annual leave lapses, the accumulation of entitlements to such leave of a worker who is unfit for work for several consecutive reference periods.

9. Central to the European Court’s reasoning was that annual leave was a health and safety measure, intended to provide a worker with a period of relaxation and leisure from work. The right to accrue annual leave could not exceed a certain temporal limit because it would not serve as a rest period for a worker and would instead simply amount to a period of relaxation and leisure [para 33].

10. The Appellant’s primary case was that the carry-over period was unlimited because Parliament had not addressed its mind to this issue, and that it was impermissible for the EAT to be called upon to legislate in this matter. There was no “national provision or practice” governing this issue. In the alternative, a carry-over period of 18 months was appropriate. The employer pressed for a 15 month period.

11. The EAT’s sequential reasoning is as follows:

    (1) Reg 13(9) has to be interpreted in so far as is possible in light of the wording and purpose of the Directive (Marleasing).

    (2) Recital 6 of the Directive expressly provides that account should be taken of the principles of ILO Convention 132 concerning Annual Holidays   with Pay (revised).

    (3) Article 9(1) of ILO Convention 132 expressly provides that paid annual leave must be granted and taken ‘no later than 18 months, from the end of the year in respect of which the holiday entitlement has arisen’. The principles adopted by the ILO therefore recognise that annual leave is something which is not capable of being accrued indefinitely.

   (4) In Schulte the CJEU provided qualification on its earlier rulings.

12. Taking into account the above points, the EAT concluded [at para 45]:

“…it is clear that in cases where a worker is absent from work on sick leave, the provisions of Article 7 of the Directive requiring Member States to take the measures necessary to ensure that a worker is entitled to 4 weeks annual leave are satisfied if, as a minimum, annual leave can be taken within 18 months of the end of the leave year in which it accrued. Indeed, as appears from KHS AG Schulte, itself, it is possible that a shorter period (there 15 months after the end of the leave year) may be justified. In interpreting regulation 13(9) of the Regulations, therefore, it is not necessary for a national court to go further than ensuring that the exception that has to be read into that regulation permits annual leave to be taken in sickness cases for a period of 18 months after the end of the year in which the annual leave accrues. The required result can be achieved by a modest alteration to the words that the Court of Appeal considered needed to be read into regulation 13(9) of the Regulations so that it reads (with the exception read in by the Court of Appeal in italics and the additional words reflecting the extent of the exception underlined):
“(9) Leave to which a worker is entitled under this regulation may be taken in instalments but, – (a) it may only be taken in the leave year in respect of which it is due, save that it may be taken within 18 months of the end of that year where the worker was unable or unwilling to take it because he was on sick leave and, as a consequence did not exercise his right to annual leave.”

13. On that basis Mr Plumb lost his right to paid annual leave for the 2010 and 2011 leave years. He was successful in his claim for the 2012 leave year.

14. Analysis: Given the importance and complexity of the issues considered in the appeal, the EAT granted both parties permission to appeal to the Court of Appeal (my analysis is somewhat tempered because of this).

15. It remains a significant cause for concern that the Regulations as drafted do not mean what they say. This offends Lord Bingham’s first principle of the Rule of Law: “… the law must be accessible and so far as possible intelligible, clear and predictable…” (The Cambridge Law Journal, Vol. 66, No. 1 (Mar., 2007), pp. 67-85). The current Regulations fail on each count. An employer cannot simply rely upon the very clear wording of Reg 13(9). The words do not mean what they say. Now they have to be aware of the import of Larner  and Plumb. The elasticity of Marleasing is also open to debate. However, the EAT has provided certainty to both employers and employees in this area, which is to be welcomed.
16. Parliament has recently amended the Regulations by introducing the Deductions from Wages (Limitation) Regulations 2014 (SI 2014/3322). It is very difficult to comprehend why (at least) the amendments in Larner were not formally introduced at the same time.

Stuart Brittenden
9 July 2015



Plumb v Duncan Print Group Limited UKEAT/OO71/15/DA (j’ment 9 July 2015)
Brittenden, Plumb, Larner, Marleasing, EAT, Working Time Regulations

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