Background
In the first case, Stringer -v- HM Revenue & Customs (ECJ C-520/06), the ECJ made the decision that employees should continue to accrue statutory holiday entitlement whilst on sick leave and, where appropriate, be able to request holiday whilst absent on sick leave. What the ECJ failed to clarify, however, was what would happen where an employee remained on sick leave at the end of the holiday year in terms of whether or not the holiday entitlement would be lost if it could not be taken in the same holiday year.
The latest case of Pereda -v- Madrid Movilidad SA (ECJ C-277/08), takes this a step further.
This case involves an employee who had an accident at work and was unable to return to work until over a month later. The employee had previously booked a four-week holiday but, as he was on sick leave, was unable to take the annual holiday. Upon his return to work, the employee made a request to book an alternative period of holiday and was told by his employer that he could not do so. The employee made a claim to the Spanish Labour Court who asked the ECJ to give a ruling on whether this constituted a breach of the EU Working Time Directive.
European Court of Justice Decision
The ECJ considered the purpose of an employee’s entitlement to paid annual leave - which is to enable the worker to rest and enjoy a period of relaxation and leisure, as distinct from sick leave, which is given so that the worker can recover from being ill. In the ECJ's view, it followed that a worker on sick leave during a period of previously scheduled annual leave has the right, on request, to take that leave during a period that does not coincide with the period of sick leave.
The ECJ stated that the only time an employee should lose their right to take annual leave is if, at the end of the year, they have had opportunity to take leave but for some reason or another have not done so. Bearing this in mind, where an employee has been sick for all or part of the holiday year and has been unable to take leave due to their illness, the employee should be allowed to take this leave at a later date, even if it means carrying it over to the next holiday year.
Implication for UK Law
The decision in the case of Pereda -v- Madrid Movilidad conflicts somewhat with the UK Working Time Regulations 1998, whereby it states that only the 8 days above the Statutory four weeks holiday can be carried over from one year to the next, whereas the decision in Pereda -v- Madrid Movilidad indicates that all of the holiday can be carried forward. The decision also suggests that the UK Working Time Regulations differ from the Working Time Directive (the Regulations being the UK law that implements the Working Time Directive).
As yet, there is no indication as to how the government will react to this decision.
Implications for Employers
It would be reasonable for employers to request a Medical Certificate for all employee absences, although some doctors may refuse to provide a certificate for less than seven days of absence. In these circumstances, to penalise an employee for not providing a certificate may be seen as being unreasonable.
Employers should consider their present sickness absence arrangements and how these should be applied following the latest ECJ decision. For example, where an employee is overseas and becomes ill, is the individual expected to telephone in by their normal start time in order to comply with company policy, or should they inform the employer of their illness immediately upon their return to the UK?
In terms of best practice, policies could be amended to allow for holiday to be carried over from one holiday year to the next. However, the Working Time Regulations will remain in existence until they are amended by government and it may therefore be simpler to continue under present arrangements as opposed to making immediate changes to company policies and procedures.
Employers should be aware of the potential of an Employment Tribunal claim being raised as a consequence of this latest ECJ decision. Employers are therefore advised to consider the following simple questions.
- How many employees are on sick leave at the moment?
- How many days of holiday entitlement do these individuals have left in the current holiday year?
- How many employees are on long term sickness?
- Have these individuals taken any holiday at all in the current holiday year?
Looking at these figures will give an indication of the risk involved in leaving policies and procedures as they are until changes to UK legislation are implemented.
Further Information
Further information can be obtained from your HR Department in respect of sickness absence and holiday entitlement.
For NorthgateArinso clients, if you would like to discuss this matter further, please call the NorthgateArinso Advice Line on 0845 299 0243 who will be happy to help.
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