Employer ordered to pay £392k for decades of unpaid holiday entitlement

A property manager has been awarded nearly £392,000 after succeeding in a long-running claim for unpaid holiday entitlement built up over decades of service.

Jennifer Cafferky, Associate Solicitor in our employment team, reports on this recent case.

The Employment Tribunal found that Mr Mohamed Ageli, who had worked for Sabtina Limited since 1987, had accrued a substantial amount of untaken leave which had been carried forward year after year under a contractual arrangement. On termination of his employment in March 2024, the tribunal ruled that he was entitled to £391,942 in unpaid holiday pay.

The tribunal accepted evidence that Mr Ageli had been repeatedly unable to take leave due to workload pressures, particularly in the earlier years of his employment. Contemporary documents showed numerous requests for holiday had been refused, and the tribunal found that an agreement had developed allowing unused entitlement to roll over indefinitely and be paid at a later date.

It concluded that this arrangement continued throughout his employment, supported by earlier payments made in lieu of leave and internal records tracking accumulated entitlement. By the time of his dismissal, the tribunal calculated that he had accrued more than 1,500 days of holiday, of which over 800 days remained unpaid after deductions for leave taken and earlier payments.

In addition to the holiday pay award, the tribunal found that Mr Ageli had been unfairly dismissed. It held that the employer had failed to carry out a proper disciplinary process, had not provided clear reasons for dismissal, and had denied him the opportunity to respond to allegations or appeal the decision.

The tribunal rejected the employer’s claim that the dismissal was for gross misconduct, finding instead that the decision was made after Mr Ageli had already been stripped of his responsibilities and that the employer later sought to justify the dismissal by relying on historic issues.

A basic award of £14,070 and a compensatory award of £91,489 were also made, with the tribunal applying a 25% uplift to part of the compensation due to a failure to follow the Acas Code of Practice.

The case illustrates the significant financial exposure employers may face where holiday entitlement is allowed to accumulate over long periods, particularly where there is evidence of an agreement permitting leave to be carried forward and paid on termination.

If you would like more information about the issues raised in this article or any aspect of employment law, please contact Jennifer on 01228 516666 or click here to send her an email.