The European Court of Justice (ECJ) has confirmed that employers are not obliged to carry over 1.6 weeks ‘extra’ holiday in cases of sickness absence.
Further to our previous legal update in July 2019, the ECJ has recently upheld the decision of Advocate General Bot in the conjoined Finnish cases of TSN v Hyvinvointialan liitto ry and AKT v Satamaoperaattorit ry, confirming that EU member states can have national laws that limit the carry-over of annual leave following sickness absence to the four-week entitlement under the Working Time Directive (the Directive).
The ECJ held that Article 7(1) of the Directive, which provides that employers in EU member states must grant every worker at least four weeks paid annual leave per year, does not preclude national laws or collective agreements which provide workers with more than this four week entitlement.
In its judgment, the ECJ reiterated the previously settled point that Article 7(1) does not prevent member states from implementing national laws which entitle workers to additional holiday over and above the four week minimum. However, where member states do choose to grant additional holiday, the conditions surrounding this extra leave will be governed by national law rather than EU law under the Directive, including conditions relating to carry over of such leave when a worker is absent from work due to illness.
But what does this mean for employers in Great Britain?
The Working Time Regulations (WTR) permit workers to take 5.6 weeks of annual leave per year (which is made up of the EU four-week minimum plus an additional 1.6 weeks’ holiday). The issues raised by this ECJ case were also considered on a domestic level by the EAT in Sood Enterprises Ltd v Healy. In Healy, the EAT similarly concluded that workers could not rely on the Directive to carry over the additional 1.6 weeks holiday in cases of sickness absence.
This recent European judgment has confirmed the EAT’s approach in Healy was correct and upholds that, where a worker is on sick leave, member states are not obliged to offer the carry-over of anything more than four weeks’ holiday under EU law.
This should be welcome news for employers. The judgment provides clarity that unless a relevant agreement (which means a written contract, a workforce agreement or a collective agreement incorporated into the worker’s contract) provides for carry over of some or all of the additional 1.6 weeks’ annual leave under the WTR, that an employer need only allow a worker who has been unable to take holiday because of sickness to carry over the 4 weeks’ leave under the Directive.
On a practical level, keeping an eye on the accrual of holiday and including this within welfare discussions with options on when this might be taken can also help avoid the building up of long periods of untaken leave and assist with business planning on the employee’s return.
