Holiday Pay, Sick Leave and PHI Benefits

A Scottish tribunal has held in Souter v Royal College of Nursing Scotland that an employee on long-term sick leave was not entitled to carry over her holiday to the following leave year and, in any event, because she had received the permanent health insurance (PHI) benefits she was entitled to, she had not suffered any loss. Although it cannot be guaranteed that a future tribunal would adopt the same approach, this is still a helpful case for employers.

The facts

Mrs Souter, an administrative assistant, worked for the Royal College of Nursing (RCN) from September 1996. She was on long-term sick leave from 7 November 2001 until her retirement on 21 April 2010. From 7 November 2002, she received PHI benefits of approximately half her salary. In March 2010, Mrs Souter enquired about her entitlement to holiday pay while she was on sick leave. The RCN informed her that she was only entitled to holiday pay in respect of the final holiday year (1 January to 21 April