The right to carry over holiday from sick leave is well established. Employers who try to apply ‘use it or lose it’ to sick employees without telling them are on shaky legal ground.
Carry-Over Rules: Quick Summary
| Scenario | Carry-over allowed? |
|---|---|
| Holiday not taken due to sickness | Yes — up to 18 months |
| Holiday not taken due to maternity/paternity leave | Yes — until end of following leave year (sometimes longer) |
| Holiday not taken for no reason | Generally no (use-it-or-lose-it applies unless employer extends) |
| Holiday accrued during long-term sick leave | Yes — full statutory entitlement accrues |
The Employer’s Duty to Inform
An employer who:
- Has a ‘use it or lose it’ policy
- Does not tell sick employees their unused holiday is at risk
- Then refuses to pay out holiday when the employee returns or leaves
…cannot rely on the expiry of the leave year to defeat the claim. The key case is King v Sash Window Workshop Ltd [2017].
Calculating Your Carried-Over Holiday
When you return from sick leave or leave employment:
- Work out total statutory leave entitlement for the year(s) affected
- Subtract any holiday actually taken in those periods
- Identify leave within the 18-month carry-over window
- Calculate value at your normal weekly pay (including regular overtime and commission)
Holiday Pay Calculation
Holiday pay must reflect your normal pay — not just basic salary. This includes:
- Regular overtime
- Regular commission
- Contractual allowances received during normal working
See our Holiday Pay Calculation Guide for how to work out the correct amount.
Practical Steps to Carry Over Holiday Accrued on Sick Leave
If you return from long-term sick leave and believe you have accrued more annual leave than you could take while off:
- Calculate what you accrued — all statutory leave (28 days for full-time workers) accrues during sick leave regardless of length
- Check your employer’s carry-over policy — some employers have a contractual policy limiting carry-over to, say, 10 days. This is only lawful for the additional contractual element above 28 days; the statutory 28 days cannot be reduced
- Raise it with HR — request a statement of your leave balance on return. If the figure does not reflect what you should have accrued, raise a grievance
- Holiday can be substituted for sick leave — you can request to take annual leave instead of sick leave to preserve sick pay entitlement and accrue holiday at the same time (particularly useful if SSP is lower than your contractual sick pay)
If you leave the business without being able to take your accrued carry-over holiday, it must be paid out at your normal rate of pay.