The Advocate General has given her opinion in the European case of KHS AG v Schulte in which she was asked to consider whether untaken annual leave accrued while the worker was on long-term sickness absence should remain available indefinitely or whether it was lawful for national legislation to provide that it would lapse after a certain period.

In her opinion the Advocate General stated that she does not agree that annual leave accrues indefinitely. This is because the objective of annual leave is to allow a worker time to recuperate and a worker will benefit most from the annual leave if he can take it in the leave year in which it is due. It is in the worker’s interest to be reintegrated quickly into the workforce and allowing him to accrue further annual leave whilst off sick will undermine this.

Most helpfully the Advocate General stated that she felt it would be acceptable for any entitlement to annual leave to expire 18 months after the end of the leave year in which it arises, although Member States may choose to apply a longer period of time for expiry.

Although the Advocate General’s opinion is not binding, this case should provide some comfort for employers concerned about employees on longterm sick for a number of years and whether to pay them in lieu of accrued annual leave.