The appellant Inland Revenue appealed against a decision that employees absent from work for a substantial period of time as a result of ill health were nevertheless entitled to holiday pay under the Working Time Regulations 1998. The respondent employees (E) had remained absent from work on health grounds until after any entitlement to statutory or contractual sick pay had been exhausted. With one exception, E's employment had eventually been terminated on grounds of ill health. E made claims for holiday pay on the basis that they had been entitled to receive it under the 1998 Regulations for as long as their employment had subsisted even though they had been absent from work. E submitted that their cases were covered by Kigass Aero Components Ltd v Brown; Taree v Bold Transmission Parts Ltd; Macredie v Thrapston Garage (2002) ICR 697 which decided that employees who were away from work on long term sick leave and who were no longer receiving any pay were nevertheless entitled to claim holiday pay under the Regulations. The Inland Revenue submitted that Kigass was wrongly decided and that a claim for holiday pay could only be brought under reg.30 of the Regulations and not as a claim for unauthorised deductions from wages under the Employment Rights Act 1996 Part II.
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