Employment Law Update - Sickness And Holidays

The decision in Stringer v HMRC clearly established that workers on long-term sick leave accumulate statutory holiday throughout their absence. If the worker is absent for many years, but remains an employee (as might happen if the employer provides PHI), does the holiday continue to accumulate?

Following a recent decision by the ECJ, it seems that there are limits. In KHS AG v Schulte, the ECJ said that the right to paid annual leave, as set out in the Working Time Directive, has the dual purpose of enabling the worker both to rest from carrying out the work he is required to do under his contract of employment and to enjoy a period of relaxation and leisure.

The right to paid annual leave by a worker who is unfit for work for several consecutive annual leave periods can reflect both the aspects of this purpose only in so far as the carry over does not exceed a certain temporal limit. Beyond such a limit annual leave ceases to have its positive effect for the worker as a rest period and is merely a period of relaxation and leisure. Therefore a worker cannot have the right to accrue paid annual leave indefinitely.

The Court concluded that statutory holiday must be taken within a reasonable time period (in this case 15 months) or it will cease to be considered as providing a rest from work, but "merely a period of relaxation and leisure". This would be inconsistent with the aims of the Working Time Directive and therefore not be available to be claimed by the worker.

The ECJ issued guidance regarding "carry over periods". It said that:

  • A carry over period must be significantly longer than the reference period for the relevant holiday year.
  • In the ECJ case of Schultz-Hoff it was ruled that a carry-over period of 6 months was not incompatible with the WTD
  • A worker must where necessary be allowed pre-determined, possibly long-term and staggered rest periods.
  • Employers should not face having a worker accumulating lengthy periods of absence.

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