The question of the statutory holiday rights of workers on long term sick leave has been up in the air for some time. In 2005 the Court of Appeal held that workers could not request payment for holiday whilst off sick. However, that issue, and whether holiday entitlement continues to accrue whilst off sick, were subsequently referred to the European Court of Justice for a ruling.

An ECJ Advocate General, whose opinion is usually followed by the full ECJ, has recently published her recommendations which look to be a mixed bag for employers. The Advocate General has indicated that workers should continue to accrue holiday entitlement in the usual way, but that they should not be able to take (or be paid for) holiday whilst on sick leave.

However, the Advocate General also stated that workers should be able to carry over accrued leave to a subsequent holiday year, and should be paid for any untaken holiday on termination of employment, even if accrued whilst on sick leave.

If the ECJ do follow this opinion, it will mean the end of the ‘use it or lose it’ approach of most employers, resulting in increased termination costs for ill health dismissals.  Further, there appears no reason why the same principles should not apply to workers on long-term leave for other reasons, including those who take their full maternity leave entitlement of 52 weeks.  This is likely to place a significant burden on employers, both financially and practically, in accommodating any accrued but untaken holiday entitlement on an employee’s return to work.

 The final decision of the ECJ is expected in the next few months.

Posted: January 31st, 2008 under Employment/HR.
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