The Court of Justice of the European Union (CJEU) has given a ruling confirming that the right for sick workers to carry forward untaken leave under the Working Time Directive only applies to the 4 week minimum leave entitlement given by the Directive.  If Member States choose to give workers more generous leave entitlements (as is the case in the UK), domestic regulations applying to that extra leave do not have to include any carry-over right.

What this means for UK workers is not entirely clear as it is still questionable whether our domestic legislation, in the shape of the Working Time Regulations 1998 (WTR), can be interpreted so as to permit leave to be carried forward from one year to the next.  This point should be resolved shortly when the Court of Appeal gives its judgment in the pending case of NHS Leeds v Larner.  If the Court of Appeal says the regulations must be interpreted to allow carry-over, then this CJEU case suggests that it will be open to the court to limit this right to the 4 weeks’ leave required by the Directive, with the additional 1.6 weeks' leave conferred by the WTR being lost if not taken in the leave year in which it accrues.  This interpretation of the WTR would be consistent with the way the Government proposes to amend the regulations to bring them into line with the Directive.

The CJEU also confirmed that although rules can provide for carried over leave to ‘expire’ if not taken within a set period, the window of opportunity for taking leave cannot be too short.  The CJEU said the period allowed to take leave must be substantially longer than the reference period in respect of which it is granted.  That suggests that, in the UK at least, the window of opportunity to take carried forward leave must be ‘substantially’ more than twelve months, casting doubt on the viability of the Government’s plans to limit carry over to 12 months in any revised regulations.  In last year’s case of KHS AG v Schulte the CJEU considered a 15 month window to be adequate and, in light of this judgment, the Government may well decide to play it safe by adopting this period in the new regulations.

Neidel v Stadt Frankfurt Am Main C-337/10, 3 May 2012