Sickness and annual leave - further clarification or further questions?

01/10/2009

By Nick Hobden, Partner and Head of Employment.

In Pereda v Madrid Movilidad SA, the European Court of Justice has held that whilst an employee can, under the European Working Time Directive, take annual leave during a period of sickness absence, they are not obliged to do so.

Mr Pereda was involved in an accident at work just before his period of four weeks' annual leave was due to start. This meant that his sickness absence, during which he was recuperating from his accident, overlapped almost entirely with his planned holiday. The ECJ decided that Mr Pereda should have been entitled to cancel his holiday and take that annual leave at a later point in time, after he had recovered from his injury.

The ECJ found that the purpose of annual leave is to offer rest and relaxation to workers, and that this is quite separate from sickness absence which is for recovery from illness. Therefore an employee who decides not to take annual leave during sickness absence is entitled to take their annual leave after they have recovered from their illness.

The ECJ went on to indicate that if, perhaps by reason of continued sickness absence, a worker is unable to use up their accrued holiday entitlement before the end of the holiday year, that worker should be allowed to carry the holiday forward to the following year.

Quite how this decision will affect workers in the UK is still rather unclear. Some aspects of the ECJ decisions in both the Stringer case (on which we have previously commented) and the Pereda case are potentially inconsistent with the terms of the Working Time Regulation 1998. Further it is important to remember that these ECJ rulings apply to the entitlement to a minimum of 4 weeks' annual leave guaranteed by the European Working Time Directive. Our domestic legislation is rather more generous. However cautious employers are now likely to consider amending their policies in order to allow employees who fall ill before or during planned annual leave to (i) take that leave at another time and (ii) carry holiday forward if they are unable to take that leave during what remains of the current holiday year.