Yes, if the employee only receives the statutory minimum of 5.6 weeks holiday per year. If you provide holiday over and above the minimum, then you can insert a clause in the contract to say any holiday over the minimum will not be paid if dismissed for gross misconduct.
Can an employee take paid holiday during a period of sickness absence?
Yes, following a recent decision by the House of Lords employees on long-term sick leave are now entitled to take paid holiday even though they are not at work. Under
this new law, employees continue to accrue their statutory holiday entitlement whilst off sick and can request to take holiday during their sickness absence.
What happens if an employee has not taken all of their holiday entitlement by the end of the holiday year?
The statutory holiday entitlement (currently 28 days) can only be taken during the holiday year that it is accrued. It cannot be carried forward into the next holiday year and it cannot be paid in lieu (unless the employee’s employment is terminating for some reason). New law relating to holiday and sickness does not make it clear what an employer should do if an employee has not requested to take their holiday whilst off sick and still has holiday remaining at the end of the holiday year!
If an employee asks to take holiday during their sickness absence but is not paid for it, can they bring a claim?
Yes. If the employee requests holiday while they are off sick but you fail to pay it they can make one of two claims. The first is a claim under the Working Time Regs which would have to be made within 3 months of the holiday requested and would only cover that particular episode of unpaid holiday. The second is an unlawful deduction of wages claim which must be made within 3 months of the holiday requested but could cover a series of episodes of unpaid holiday going back as far as 6 years.