 First of all… do you remember:
Stringer v HMRC - Tribunal ruled that workers could accrue holiday pay whilst on sick leave and that holiday should be allowed to be carried forward into the next holiday year.
Pereda v Madrid Movilidad SA - Tribunal ruled that workers who fall sick whilst on holiday should be allowed to reschedule leave, even if it means them then taking it during the next leave year.
Shah v First West Yorkshire - Tribunal ruled that Shah was entitled to take the holidays he was prevented from taking due to a different period of absence (a broken leg) at some subsequent time in the following leave year.
However, all of these decisions were in conflict with the Working Time Regulations which specify that it is unlawful to carry over more than 8 days per year.
But then last year, the European Court of Justice (ECJ) provided guidance and as a result of KHS AG v Schulte, stated that the ‘Working Time Directive does not require an unlimited accumulation of a worker’s paid annual leave during a period of long-term sickness absence’.
The ECJ further commented that a right to an unlimited accumulation of paid annual leave acquired during long-term sick leave would no longer reflect the purpose of the right to paid annual leave, which is to enable the worker to rest from carrying out work and to enjoy a period of relaxation and leisure.
Common sense you might think, but in reality this situation still causes a headache for employers in the UK as it is still not clear if carrying over annual leave to the next year is permitted by the Working Time Regulations.
We therefore suggest that for now you continue to allow workers to carry over at least 8 days holidays to the next leave year if they have been unable to take this due to sickness. We also advise you to review your sickness absence and annual leave policies to ensure that both managers and staff are absolutely clear on your position.
That said, our advice is also to ‘sit tight’ and be prepared to amend your approach as the Government is currently consulting on amending the Working Time Regulations and may well take the decision of the ECJ into account when making their decision.
Need some support with any complicated absence issues? Get in touch, our employment law experts are here to help!
Also this update:
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