The Minister for Jobs, Enterprise and Innovation recently announced that he proposes to amend the Organisation of Working Time Act, 1997 (OWTA) to allow for the accrual of annual leave when a worker is on long-term sick leave. The proposal would mean that workers who have been sick during a leave year and were not able to take their annual leave entitlement will now be able to take such accrued annual leave within a fifteen (15) month period after the end of the leave year.

The amendment is as a result of a number of decisions from the Court of Justice of the European Union (CJEU), which started with the Stringer/Schultz Hoff case in 2009, and are authority for the proposition that sick leave cannot dilute the entitlement to annual leave. It was subsequently decided in the case of KHS AG v Schulte that national law could impose a cap on the unlimited accrual of annual leave during successive years of absence on sick leave with a 15 month carry over period deemed appropriate in this case.

Previous Irish decisions highlighted a contradiction between the Irish position under the OWTA and the decisions of the CJEU. Under the OWTA, employees accrue entitlement to annual leave based on the number of hours worked. The Act is silent on how time spent on sick leave is to be regarded for the purposes of annual leave calculations. The CJEU, however, identified that there is a distinction between annual leave and sick leave. Annual leave is given to workers to enable them to rest and enjoy a period of relaxation and leisure. The purpose of sick leave is different. It is given to workers so that they can recover from an illness.

The amendment will be welcomed by employers, as it clarifies the confusion which had arisen on foot of the European case law.