Unable to take holiday due to sickness absence

Under the Working Time Directive, statutory holiday must be taken in the year in which it is built up. A worker is not entitled to carry forward any of their four weeks’ statutory holiday into the next holiday year.

The position for the extra 1.6 weeks’ leave under domestic law is different. A worker can carry forward some of this extra leave, but only if the contract allows this. Either way, there is an absolute bar on paying workers for their unused statutory holiday, except at the end of the employment. This unused statutory holiday will be lost unless the contract allows some of it to be carried forward into the next holiday year. The reasoning behind the absolute bar on paying for holiday relates to the health and safety purpose of holiday – as a period of rest from working.

There is an important exception for holiday that is unused because the worker is too unwell to take it. The European Court of Justice looked at what happens where an employee falls ill while on holiday (Pereda v Madrid Movilidad SA [2009] IRLR 959) and concluded that an employer cannot force a worker to take annual leave when off work sick. So instead, sick workers must be allowed to carry over their holiday, effectively by re-designating their statutory annual leave as sick leave and carrying forward the unused holiday to take when they are fit to work.

However, the right to carry forward statutory annual leave is not without limits. The CJEU has confirmed that unused holiday must not be allowed to build up indefinitely, because otherwise it would lose its main purpose as a rest period, and instead become merely a period of “relaxation and leisure”. It would also cause problems for the employer, storing up a liability to pay for large amounts of unused leave (KHS AG v Winfried Schulte [2011] EUECJ C-214/10).

Instead, the court said that collective agreements and national laws can provide for a cut-off point for any carry forward of annual leave. That cut-off point must not be too short: As a guide, in one case (Schultz-Hoff v Deutsche Rentenversicherung Bund [2009] EUECJ C-350/06) a carry-over period limited to six months was found to be too short, whereas the 15-month cut-off point in the Winfried Schulte case was judged acceptable.