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In an important ruling for employers the European Court of Justice (ECJ) has decided to allow workers to claim back holiday time lost due to illness.
The ECJ decision in the case of Pereda means that, under the Working Time Directive (WTD), where a worker falls sick before or during a period of scheduled annual leave so that they cannot take the annual leave, they can then request to take it later – the period of illness whilst on holiday should not count towards the minimum period of 4 weeks paid annual leave.
The ruling came in a Spanish case heard at the European Court of Justice regarding the Working Time Directive, to which Britain has signed up.
Francisco Pereda, who works for Madrid city council, was scheduled to take a month’s annual leave in the summer of 2007.
He was injured shortly before the annual leave was due to start and was refused a request to move his holiday by his employer.
Judges decided that the employee should have been allowed to take his holiday at another date – and if necessary that it could be carried forward to the next holiday year.
Although the case related to someone who had booked his holiday and then become ill beforehand, the judgment specifically says that if a "worker does not wish to take annual leave during a period of sick leave, annual leave must be granted to him for a different period".
According to the ECJ the purpose of annual leave is to enable a worker to rest and enjoy a period of relaxation and leisure whilst the entitlement to sick leave is different. Sick leave is so that a worker can recover from being ill.
UK employers' representatives have voiced their displeasure at the ruling claimimg it represents an added burden on business at a time of economic difficulty.
The Federation of Small Businesses (FSB) said the consequences for its members could be "highly detrimental", while the Chartered Institute of Personnel and Development (CIPD) went further, describing the judgment as being "divorced from the real world".
“The opportunity for abuse is present.” said Susan Mayall, Employment solicitor at Pearson Hinchliffe Commercial Law. “The ruling appears to enable unscrupulous employee to lengthen their holiday by alleging they were sick while on holiday – this raises serious concern for employers.”
Ms Mayall added: “It is worth remembering however, that an employer can contractually require an employee to phone in and report that they are sick during their holiday and request that the employee provides credible evidence that they would have been unable to work if they had not been on holiday, by providing a doctor's sick note.”
Addendum, 16 October 2009
The replacement period of annual leave must be scheduled according to the applicable rules of national law having regards to the business interests of the undertaking. These arrangements may not exclude the possibility of the replacement leave being taken after the end of the leave year in which the leave was originally arranged.
This is the second potential shake up to employer’s sickness policies this year. The first followed the ECJ ruling in a case of Stringer in January where it was held that workers on long term sick leave accrue statutory annual leave and have to be paid for it at their normal rate of remuneration even if their sickness persists for the whole of the relevant leave year. That ruling was inconsistent with UK law and the Government should consider the need to amend the law.
Our advice at present on sickness policies is to consider amendment to allow the re-scheduling of leave but not to allow carry forward until the Government makes a decision on that matter.
Pearson Hinchliffe Commercial Law are specialsits in advising employers on employment law matters, especially entitlement to sick pay and the Working Time Directive. To contact us, please use the details below.
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