Holidays to be carried over when staff fall sick

Holidays to be carried over when staff fall sick: new European ruling could cause problems for employers   

The European Court of Justice (ECJ) has ruled that workers who go on sick leave during a period of scheduled annual leave should be allowed to reschedule their holidays, even if that means allowing leave to be carried forward into a subsequent holiday year.

Background
The decision follows the ECJ's ruling earlier this year in the cases of Stringer and Schultz-Hoff.  Following those judgments it became clear that paid annual leave under the Working Time Regulations (WTR) continues to accrue during sick leave, and that workers can opt to take that leave even when off sick (subject to the employer's right to control when leave is taken).

Whilst the Stringer case clarified some issues, it left others in doubt, in particular:

• whether someone who does not take their WTR leave entitlement because of illness can carry that leave forward to a subsequent leave year; and
• whether workers who fall ill during a period designated as annual leave can insist on having their leave reclassified as sick leave and their annual leave reimbursed.

The recent ruling in Pereda v Madrid Movilidad goes some way towards answering these questions. In essence the ECJ said that workers who are on sick leave have a choice: they can take annual leave if they wish or they can insist on postponing their annual leave and taking it at a later date, possibly even in a subsequent leave year if it is not possible to schedule leave before the current year ends.

This takes things a step further than Stringer. In that case the ECJ said a worker should be permitted to carry forward leave if he or she is 'unable to take leave through no fault of his own'. This begged the question: in what circumstances will a worker be considered 'unable' to take leave, assuming the employer does nothing to prevent leave being taken? According to the ruling in Pereda, the answer, it seems, is that a worker will be 'unable to take leave' whenever the worker is on sick leave and doesn't want to take holiday, regardless of the severity or nature of the illness.

Impact for Employers: carrying forward leave
Even though EU law says workers should be allowed to carry forward leave in some cases, it is not yet clear whether UK law in the shape of WTR allows this. The WTR are quite clear that leave cannot be carried over from one year to the next. There is, however, a risk of tribunals 'reinterpreting' the WTR to give effect to European law, despite their clear wording.

Simon Rice -Birchall is a partner at Eversheds LLP. He has considerable experience of employment litigation and has a reputation in the marketplace for his discrimination law expertise.

For information, please contact Simon Rice-Birchall at Eversheds  LLP Human Resources Team in Leeds on 0845 498 4978.