This follows the decision by the European Court of Justice (ECJ) earlier in the year that member states can allow workers who are off sick to take annual leave and that member states can only prevent a worker taking leave while off sick if they ensure that the worker has the right to carry over annual leave to a subsequent leave year if unable to take it because of illness.

Following the ECJ’s decision, the Revenue accepted that a worker’s entitlement to compensation on termination of employment could not be affected by sickness absence. It also accepted that workers on long-term sickness absence and who apply to take annual leave but cannot because they have no right to carry over under the Working Time Regulations (WTR), are entitled to paid annual leave.

The case returned to the House of Lords to decide the issue of whether unpaid annual leave under the WTR and/or a payment on termination could also be pursued as unauthorised deductions of wages claims under the ERA.

The Lords said that it can. The important practical effect is that a worker can take advantage of the more generous time limits which apply to unlawful deduction claims (three months from the last in a series of deductions, allowing claims to go back more than three months if the underpayments form part of a series), as opposed to three months under the WTR.

Mark Serwotka, PCS general secretary said: “This is a victory for common sense. The ECJ confirmed that sick workers cannot be refused paid annual leave if they wish to take it, and nor can employers reduce termination payments on account of sickness. The House of Lords has now made it easier for employees to pursue employers who continue to illegally deny them their rights.”

The successful employees in the case were all members of PCS. PCS has given them legal assistance throughout the case and instructed Thompsons to act on behalf of their members.