Sick leave and holiday


There have been a number of important ECJ decisions interpreting the relationship between sickness absence and statutory holiday entitlement under the WTR. In Stringer v HM Revenue and Customs, C-520/06, the ECJ decided that workers accrue holiday while on long-term sick leave and must be allowed to take it on their return to work, or be paid in lieu of untaken leave if their employment ends. Employees on long-term sick leave who are owed holiday pay can bring a claim for the unlawful deduction of wages under the Employment Rights Act 1996 (HM Revenue and Customs v Stringer and others [2009] UKHL 31).


A worker who has not been able to take their statutory holiday during the holiday year because of sickness must be allowed to carry that holiday forward into the next holiday year, even if the employment contract expressly forbids this (Dominguez v Centre Informatique du Centre Quest Atlantique [2012] EUECJ C-282/10). 



The right to carry forward annual leave unused due to sickness absence applies only to the four weeks of holiday under the Working Time Directive (Sood Enterprises Limited v Healey [2013] UKEAT 0015/12/B1/1403). Member states can make their own rules about any annual leave beyond the mandatory four weeks (Neidel v Stadt Frankfurt am Main [2012] EUECJ C-337/10).



A worker does not have to prove that they were too sick or injured to take their statutory holiday in order to be able to carry it forward (Plumb v Duncan Print Group Limited [2015] UKEAT/0071/15/DA).



The European Court has said that the right to carry forward statutory annual leave is not without limit. Unused holiday must not be allowed to build up indefinitely, or it would lose its main purpose of rest, and instead become “merely a period of relaxation and leisure”. It may also cause problems for the employer who would be building up a liability to pay for large amounts of unused leave if the employment eventually ends due to sickness absence, and who may struggle to organise cover during the absence (KHS AG v Winfried Schulte [2011] EUECJ C-214/10). Instead of allowing holiday to build up indefinitely, collective agreements and national laws can fix a cut-off point for any carry forward of annual leave, but it must not be too short. As a guide, in Schultz-Hoff v Deutsche Rentenversicherung Bund [2009] EUECJ C-350/06, a carry-forward limited to six months was judged too short, but a 15-month cut-off point was judged acceptable.



In Plumb v Duncan Print Group Limited [2015] UKEAT/0071/15/DA, the EAT tackled this issue with a new ruling, drawing on the International Labour Organisation’s Holidays with Pay Convention to concludethatunder UK law, holiday left untaken due to sickness or injury can be carried forward for a maximum of 18 months, after the end of the holiday year in which it accrued. Any holiday left untaken beyond that point will be lost. This ruling, said the EAT, is consistent with the health and safety purpose of the Working Time Directive. Both sides have been given leave to appeal to the Court of Appeal. 



In the public and the private sector, workers are entitled to be paid for any unused statutory holiday left at the end of the employment whether or not they asked to take it. This was decided in NHS Leeds v Larner [2012] EWCA Civ 1034, a case supported by general union Unite. 



Holiday taken during sickness absence must be paid at the normal rate of pay. It makes no difference that rights to contractual and statutory sick pay have been exhausted.


Another important ECJ decision is Pereda v Madrid Movilidad SA [2009] IRLR 959. This case looked at what happens where an employee falls ill while on holiday. The ECJ concluded that an employer cannot force a worker to take annual leave when off work sick. Instead, workers must be allowed to carry over their holiday. In principle, this means that workers who fall ill while on holiday must be allowed to redesignate their statutory annual leave as sick leave and to carry forward the unused holiday to take when they are fit to work. So, for example, if an employee is part way through their holiday and they become ill, assuming they can provide the necessary medical evidence to confirm their incapacity, an employer must allow the employee to take holiday at a later time. This is because under the Working Time Directive, the purpose of annual leave is to enable workers to have a period of rest and relaxation away from work, whereas the purpose of sick leave is to enable a worker to recover from illness. If an employee is on sick leave, they cannot enjoy a period of rest and relaxation so should be entitled to take that leave elsewhere in the year.