Holiday and sickness absence - the next chapter

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13 July 2011

Following the recent Stringer case, which decided that workers on sick leave continue to accrue their statutory holiday, it seems that uncertainty concerning the relationship between holiday rights and long-term sick leave has not just been causing headaches for British employers.

In a German case about holiday rights under the Working Time Directive and long term sickness (KHS AG v Schulte C-214/10), the national court asked the European Court of Justice (ECJ) to decide whether accrued holiday rights can expire where a worker is on long term sick leave, or whether this is incompatible with the EU Working Time Directive.

Mr Schulte had been absent on long term sick leave for over six years before his employment was terminated. He brought a claim for payment in lieu of annual leave accrued from 2006 – 2008. His employer argued that his accrued holiday rights had expired under the terms of a collective agreement so that he could no longer claim a payment in lieu of the relevant holiday.

The Advocate General, whose role it is to give independent opinions for European cases before the ECJ considers its judgment, has now delivered her opinion on the case.

The Advocate General's opinion is that:

  • EU law does not require that workers on long-term sick leave accrue the right to paid annual leave without any time limitations. She said that allowing a worker to take accrued leave several years after the leave year to which it related would not achieve the Directive's purpose of enabling the worker to recuperate from the effort and stresses of that year, which is most effectively met when workers take leave in the year it arises.
  • A national law under which annual leave entitlement expires 18 months after the end of the relevant leave year (effectively giving workers up to two and a half years to use a year's leave entitlement) would be sufficient for the effective exercise of the right to annual leave in cases of long term sick leave. She commented that this was a guideline only, but also expressly mentioned that a period of six months would be insufficient.

The Advocate General's opinion is not binding on the court but will be considered by the ECJ before its judgment is given at a later date. However, the opinion of the Advocate General will be a welcome sentiment to many employers who will be hoping the ECJ will follow suit.

If you would like advice on managing holiday entitlement and long term sickness absence, please contact Chris Seaton on 0117 939 2213 or email chris.seaton@burges-salmon.com or contact the lawyer at Burges Salmon with whom you usually deal.

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