A recent decision of the European Court of Justice may have a significant effect for public sector employees who fall sick during a period of annual leave. In Pereda v Madrid Movilidad the ECJ held that, where a worker's pre-arranged annual leave coincides with a period of sick leave, the worker must have the option to designate an alternative period for the exercise of the right to annual leave under the EC Working Time Directive.

It seems unlikely that the Working Time Regulations 1998 (WTR) can be interpreted as fully implementing the Directive in this regard, and therefore workers in the private sector may not be able to benefit from this decision unless the WTR are amended. However, the decision will have direct effect so far as public sector workers are concerned and they can therefore rely upon this decision immediately. It is likely that case law will follow in this area in order to establish whether domestic legislation complies with the Directive and this will impact upon the ability of private sector employees to enforce this decision.