The Advocate General of the European Court of Justice (ECJ) has opined in KHS AG v Schulte (C-214/10) that workers on long term sick leave are not entitled to carry over their annual leave entitlement indefinitely. When considering the relationship between holiday rights under the Working Time Directive (2003/88) (the Directive) and long term sick leave, she said that holiday rights should expire no earlier than 18 months after the end of the relevant holiday year.

Mr Schulte worked for KHS in Germany and was on long term sick leave for over six years. On termination of his employment, Mr Schulte claimed payment in lieu of 3 years' holiday entitlement. The claim succeeded but on appeal was referred to the ECJ on the question of compatibility with the Directive.  The Advocate General was of the opinion that to require annual leave to accumulate indefinitely would not achieve the Directive's purpose of allowing the worker sufficient time to recuperate.  Holiday entitlement that expires after a period of 18 months from the end of the leave year in which it arises was seen as sufficient. This should, however, be seen as a guideline period and Member States are still able to make more generous provisions.

If the Advocate General's opinion is followed by the ECJ this will mark an important shift in the ECJ's approach to holiday and sick leave; currently, following Stringer v HMRC, workers who are on long term sick leave accrue their four week statutory holiday year after year.  However, the Advocate General's opinion is advisory only and the ECJ is not obliged to follow it, so it remains to be seen what conclusion the ECJ reaches and how Member States will implement it.