Mr K Farrell v Liverpool University Hospitals NHS Foundation Trust — 2020

Mr Farrell was employed by Liverpool University Hospitals NHS Foundation Trust under Agenda for Change terms and retired on 31 May 2019 after a period of sickness absence beginning on 22 August 2018. The dispute was whether the Trust could lawfully recalculate his carry-over holiday so that only the statutory 20 days, rather than his contractual entitlement, counted when he left employment.

The tribunal accepted the Trust's evidence that it had introduced a 2017 Managing Sickness Absence at Work Policy containing a provision limiting carry-over of sickness-related annual leave to the statutory minimum, and it noted the Trust's reliance on Sood Enterprises Ltd v Healy. It held, however, that Healy concerned statutory Working Time Regulations entitlement, whereas Mr Farrell's claim turned on contractual leave. The tribunal was not satisfied that the policy term limiting carry-over to 20 days had been incorporated into Mr Farrell's contract, either expressly or by custom and practice, and it noted the Trust could not produce a satisfactory contractual basis for the change.

On the facts found, the tribunal concluded that the claimant's annual leave remained governed by the NHS General Council/Whitley conditions referred to in the judgment. It found that by 31 March 2019 he had accrued 33 days' annual leave, had taken 14 days, and therefore had 19 days' leave due in lieu on retirement. The Trust paid him only the equivalent of 6 days in his final salary, so the value of 13 days was withheld.

The tribunal therefore upheld both the breach of contract complaint and the unlawful deduction from wages complaint under section 13 of the Employment Rights Act 1996, and ordered the respondent to restore to Mr Farrell the value of the 13 days' contractual annual leave carried over from the 2018/19 leave year. The judgment did not quantify that amount in money terms, and the separate interest notice is procedural only.