Employee holiday can be a tricky issue to navigate for employers, but it's key that employers fulfil their legal duties.
Advocate General Bot of the European Court of Justice (ECJ) has provided his legal opinion that neither the Working Time Directive (the Directive) nor the EU Charter of Fundamental Rights prevent a national law or collective agreement from limiting the carry-over of holiday, in the event of sickness, to the 4 weeks’ leave required under the Directive.
This supports the widely held view in Great Britain, following the EAT’s decision in Sood Enterprises Ltd v Healy (Healy), that the Directive does not require carry-over of the additional 1.6 weeks’ leave where a worker has been unable to take holiday because of sickness.
The law
Article 7(1) of the Directive provides that EU Member States must “ensure that every worker is entitled to paid annual leave of at least 4 weeks”. In Great Britain, this is implemented by the Working Time Regulations 1998 (WTR), which state that workers are entitled to take 5.6 weeks’ paid holiday in each leave year (comprised of the 4 weeks’ required by the Directive and the national right to an additional 1.6 weeks’ leave).
A common issue faced by employers is dealing with and correctly calculating the holiday entitlement for workers who are on long-term sick leave. In recent years, there have been a number of high profile decisions which have sought to clarify the relationship between holiday entitlement and sickness. Amongst other things, these cases have held that:
- Statutory holiday accrues during sickness absence.
- Workers may take, and be paid in respect of, their statutory holiday entitlement during sickness, albeit an employer cannot compel them to do so.
- If workers are prevented from taking or choose not to take their statutory holiday due to sickness, they must be allowed to take it following their return to work, even if it means carrying it over to the next leave year, so as not to lose their entitlement.
This being the case, we are often asked by employers whether they must allow an employee, following a period of long-term sickness absence, to carry-over and take (and be paid for) 4 weeks’ leave as required by the Directive or 5.6 weeks’ leave as required by the WTR?
Until now, we have followed the EAT decision in the case of Healy. That case decided that the Directive does not require carry-over of the additional 1.6 weeks’ leave where a worker has been unable to take holiday because of sickness, unless there is a relevant agreement between the parties providing for it.
Advocate General’s Opinion and Current Position
In two conjoined cases from Finland (TSN v Hyvinvointialan liitto ry), employees argued that the rules regarding carry-over of holiday during sickness should apply to both the 4 weeks’ leave under the Directive and to any holiday in excess of the 4 weeks’ under any national law or collective agreements.
Whilst the final decision of the ECJ is awaited, Advocate General Bot’s opinion on the case is that, provided the “hard core of minimum protection” (i.e. the 4 weeks’ paid leave laid down in Article 7 of the Directive) is not affected, Member States are free to set their own rules in relation to the granting of, carry-over and limitation of any paid annual leave that is over and above that minimum 4 week entitlement.
This view is likely to be viewed positively by employers and the final ECJ decision may well confirm (if the ECJ follows the Advocate General’s opinion) the domestic position in Great Britain that unless a relevant agreement provides for carry over of the additional 1.6 weeks’ annual leave under the WTR only 4 weeks’ leave under the Directive may be carried over by workers who have been unable to take holiday because of sickness.
For more information on the topic, please contact Ali Hough or a member of our employment team.
