The long awaited decision in the Ainsworth and others case was handed down on 20 January 2009. The European Court of Justice had to consider whether an employee who was off on long term sick leave was entitled to accrue annual leave in respect of the period for which they were off sick.

In short, the decision is as follows:

  • a worker who is on sick leave for the whole or part of an annual leave year is entitled to accrue annual leave under the Working Time Directive, despite the fact they are not actually at work;
  • the national courts (or Government) may prevent a worker from designating a period of what would otherwise be sick leave as paid holiday leave, but if the worker cannot take holiday during the leave year because of illness they must be allowed to take it at a later date; likewise, national law may allow a worker to take holiday during a period of sick leave; and
  • a worker must be compensated for untaken holiday leave at the end of the employment relationship, even if he/she has been on sick leave for the whole holiday year and even if some of this leave has been carried forward from the previous year.

None of the claimants involved in this case were claiming more than a year’s worth of annual leave, but there is no indication in the judgment that there should be any restriction on how long accrued leave can be carried forward in these circumstances.

This case will now be sent back to the House of Lords for a final, national decision.

Whilst this decision is likely to be unpopular with employers, the decision only relates to annual leave under the Working Time Directive. Therefore contractual annual leave over and above the statutory minimum amount does not have to be dealt with in this way.