A landmark ruling by the ECJ has provided authority for the proposition that a period of sickness whilst on annual leave does not count towards the minimum period of holiday prescribed by the Working Time Directive (WTD). The WTD was implemented in the UK by the Working Time Regulations 1998, which currently provide for a statutory minimum period of 5.6 weeks paid annual leave. Following the recent decision handed down by the ECJ in Stringer, which held that workers continue to accrue holiday whilst they are on sick leave, this latest decision deals another potential blow to employers.

  • Mr Pereda had arranged to take four weeks annual leave from his job with Madrid City Council, but unfortunately suffered an accident two weeks before this leave was due to begin.
  • The accident left him incapacitated for six weeks, meaning that his sick leave overlapped with his annual leave.
  • The court said that employees had the right to ask for statutory leave to be "reallocated" when it was spoilt by sickness.
  • This principle is likely to apply even if an employee becomes ill during a period of pre-arranged annual leave.

This judgment has also provided some clarification on a point left open by the House of Lords in the Stringer case. The House of Lords held that a worker had the right to carry over their accrued statutory holiday entitlement to the subsequent leave year, if they had been 'unable' or they 'had not had the opportunity' to take the holiday whilst they were on sick leave. However, no guidance was given on what 'unable' means. In Pereda, the ECJ suggested that the sickness itself would make a worker 'unable' to take the holiday.

Pereda v Madrid Movilidad SA