Carrying forward unused holiday after sickness

A worker who has not had the opportunity to use up all their statutory holiday during the holiday year because of sickness must be allowed to carry that unused holiday forward into the next holiday year, even if the employment contract expressly forbids this (Dominguez v Centre Informatique du Centre Quest Atlantique (C-282/10)).

Although a worker who has not been able to take their leave because of sickness must be allowed to carry it forward into the next holiday year, this right is not without limits. The ECJ has recently confirmed that “unused holiday cannot be allowed to build up indefinitely” because “otherwise, the leave would lose its main purpose as a “rest period”, and instead become “merely a period of relaxation and leisure”. The ECJ also pointed to problems for the employer, who would be storing up a liability to pay for large amounts of unused leave if the employment eventually ends due to sickness absence, and may also face difficulties organising work to manage the absence (KHS AG v Winfried Schulte Case C-214/10).

Collective agreements and national laws can agree a cut off point for any carry forward of annual leave, but that cut off point must not be too short. As a guide, in Schultz-Hoff v Deutsche Rentenversicherung Bund (C350/06), a carry-over period limited to six months was held to be too short, whereas the 15-month cut-off point in the Winifried Schulte case was considered to be acceptable.

The government wants employers to be able to insist that leave unused due to sickness absence is taken during the current holiday year if there is still time left in which to take it. It also wants to give employers the right to require that leave be carried forward into the following year if there are good business reasons for this. However, it is not clear whether ECJ case law will allow either option.