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Can a sick worker really go on holiday?

Posted on 16th February 2009
Case law

Workers on sick leave continue to accrue minimum annual leave under the European Directive despite the fact they are not working.

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if sickness absence prevented a worker from taking annual leave national law must allow the worker to take it at a later date

Stringer and others v HM Revenue and Customs

Please note that this article is not the latest position.  Read our later articles Sickness absence and paid annual leaveFailure to pay statutory annual leave is a deduction from "wages"Right to defer holiday until after sick leaveSickness during holidaySickness absence and the entitlement to payment on termination of employment for untaken holiday, Entitlement to statutory holiday pay is lost if not requested by employee on long-term sick leave and Holidays and sickness absence.  Click on the links to find out more.

Background

The Stringer case is a number of conjoined cases. One of the cases involved a worker who, having been on indefinite sick leave for several months, made a request to her employer for a number of days paid annual leave. Another case involved workers on long-term sickness absence who claimed payment in lieu of holiday which they had been unable to take during the previous leave year.

The employment tribunals allowed the claims on the strength of an EAT judgment in the case of Kigass Aero Components v Brown, which the EAT maintained permitted annual leave to accrue regardless of whether the worker is actually working. This meant that a worker could designate a period as paid annual leave even if they were on sick leave during that period.

The employers appealed but their appeals were dismissed by the EAT, who agreed with the judgment of the employment tribunals. This decision was in turn appealed and the Court of Appeal upheld the appeals. It held that, contrary to the EAT's judgment in the Kigass case, workers could not take their statutory annual leave entitlement in respect of periods when they were absent on sick leave. If they were absent for a whole leave year, they were not entitled to be paid in lieu of taking the annual leave, even on termination of employment.

The employees then appealed to the House of Lords, which referred specific questions in the case to the ECJ in order to seek its interpretation of the Working Time Directive.

The ECJ's judgment

The ECJ has held that workers on sick leave continue to accrue minimum annual leave under the Directive despite the fact that they are not working. This is in accordance with the original decision of the employment tribunal and the EAT and is contrary to the Court of Appeal's decision.

The ECJ decision only applies to the Directive's minimum four week entitlement and not to the more generous annual leave provisions included in the Working Time Regulations.

The ECJ indicated that this decision was largely based on policy considerations, in particular in relation to the health and safety of the worker, observing that, 'the entitlement of every worker to paid annual leave must be regarded as a particularly important principle of Community social law from which there can be no derogations.' The ECJ's position applies regardless of whether the worker is on sick leave for part or the whole of the leave year.

The ECJ's decision not only held that workers continue to accrue minimum annual leave while on sickness absence, but also that they are entitled to be paid their normal remuneration for such accrued annual leave in lieu of taking it on termination of the employment relationship. The ECJ held, however, that the issue of whether a worker should be able to take annual leave during a period that would otherwise be sick leave should be left to national law to determine. It did maintain that if sickness absence prevented a worker from taking annual leave national law must allow the worker to take it at a later date, even if this was after the end of the relevant leave year.

The cases will now proceed in the House of Lords, which will be in the unenviable position of being obliged to determine the difficult question of whether workers should be entitled to take annual leave while they are on sick leave. This is by no means simple, as the ECJ observed that the purposes of sick leave are very different to the purposes of annual leave, and in this sense it is important to keep them separate as far as possible. On the other hand the ECJ was clear in its concern to protect the worker's right to minimum annual leave.

What does this decision mean for employers?

This decision is a win for employees which may cost employers greatly. There remain some unanswered questions which government may need to legislate. Remember that this decision applies only to the minimum four week annual leave entitlement.

Public sector workers

For public sector workers this case will have an immediate impact under the principle of direct effect. Public employers must now allow employees to carry over any unused holiday from one leave year to the next if their sick leave has prevented them from taking it and must give payment in lieu of such untaken holiday as part of any termination payment without any discount in respect of the period of sick leave.

Private sector workers

The impact is not so clear for private sector workers because they will have to wait for the House of Lords decision. Claimants will be advised to bring claims as they arise to avoid being time barred but these claims will no doubt be stayed pending the House of Lords decision.

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