A recent ECJ ruling has brought the issue of annual leave and sick leave entitlements into sharp focus again*. The ECJ has ruled that if an employee becomes ill whilst on a period of annual leave then they must be allowed to take their annual leave at some other time, even if this results in the leave being carried over to the following leave year.

Employers will be concerned at the potential cost and business administration implications of this decision. The ECJ reiterated that the entitlement to paid annual leave must be regarded as a particularly important principle of community law, from which their can be no derogation. The ECJ viewed the purpose of the entitlement to paid annual leave is to enable a worker to rest and enjoy a period of relaxation. This is a distinct concept from sick leave, which is allowed to enable a worker convalesce from a period of illness. The ECJ said that following on from this, a worker who is on sick leave during a period of pre-planned annual leave has the right on his request to take that leave in another period, not coinciding with the sick leave period.

Earlier this year the ECJ ruled that employees on long term sick leave continue to accrue their statutory entitlement to four weeks paid annual leave**. The upshot of the Stringer case caused ripples in this jurisdiction as the Organisation of Working Time Act 1997 links the entitlement paid annual leave with hours worked and therefore employees on long term sick leave do not currently accrue an entitlement to paid annual leave under Irish law. This provision appears to be incompatible with EU law and the Government at some point may be required to introduce amending legislation. A recent labour court decision here followed the Stringer principle*** by finding that a clinical nurse manager who was on sick leave for over one year preserved her right to annual leave.

This judgment causes further logistical issues for employers. The difficulties relate to the potential implications of the carry over period. Currently under the Organisation of Working Time Act 1997 carry over is limited to 6 months into the following leave year, however the implications in this Judgment may mean that our domestic legislation may further be incompatible with EU law. Also following the Stringer case, there had been a school of thought that employers might be able to minimise their exposure for accrued holidays by requiring employees on long term sick leave to take their holidays during a period of paid sick leave, however this decision appears to rule this option out.

Comment

This case, together with the Judgment in Stringer, means that employers need now, more than ever, to robustly manage employees who are long term sick leave. Employers will also have to be alert to and deal with the issue of possible abuse of those who return from holiday claiming that they had been ill during their period of annual leave and the consequences of this from a business administration and pay roll perspective.