It is well established, as a result of a number of decisions by the European Court of Justice (ECJ), that an individual’s right to take annual leave enshrined in the European Working Time Directive (2003/88/EC) is distinct from their need to take sickness absence. It is now clear that an individual’s holiday entitlement continues to accrue during periods of sickness absence, and that an employee who is absent due to sickness and is unable to take holiday has the right to take it at a later date (or to be paid in lieu of the holiday if their employment is terminated).
Does it matter when the period of sickness starts?
Until recently, it was not clear whether or not an employee is entitled to take annual leave at a later date regardless of when they fall sick, whether they fall sick before the period of leave is due to start or fall sick during a period of leave. The ECJ has now given its judgment in the case of Asociación Nacional de Grandes Empresas de Distribución (ANGED) v Federación de Asociaciones Sindicales (FASGA) and others (Case C-78/11 ECJ).
The ECJ has made it clear that the point at which a worker’s sickness arises is irrelevant; a worker is entitled to take paid annual leave which coincides with sickness at a later time, irrespective of the point at which the incapacity for work arose. If necessary, and in accordance with the ECJ’s previous decisions, a new period of annual leave may be scheduled outside the normal reference period for holiday (i.e. beyond the holiday year).
A copy of the ECJ judgment in ANGED v FASGA is available here
Carrying forward holiday
The ECJ has also recently held that the period in which unused holiday can be carried forward must be “substantially longer” than the reference period. In KHS AG v Schulte (Case C-214/10 ECJ) it held that a carry-over period of 15 months was sufficient; in Neidel v Stadt Frankfurt am Main (Case C-337/10), a period of nine months was held not to be sufficient.
In the UK, we currently have two conflicting decisions from the Employment Appeal Tribunal (EAT) on the issue of whether an individual can carry forward their unused holiday entitlement to a subsequent holiday year, even if they have not requested to take a period of holiday during their sickness absence. The first of these decisions, Larner v NHS Leeds, in which the EAT held that it was not necessary for the employee to give notice of her request to take annual leave, has been appealed to the Court of Appeal and judgment is expected shortly (see our previous briefing).
Amendments to the Working Time Regulations
In 2011, as part of its Modern Workplaces Consultation, the Government consulted on its intention to amend the Working Time Regulations 1998 to take into account developments as a result of ECJ decisions. We can also expect guidance for employers on dealing with the issue of sickness absence coinciding with annual leave. It had been suggested that the amended Regulations would take effect in 2012, but as the draft Regulations have yet to be published, it now appears unlikely (although not impossible) that we will have the amendments in place this year.
In the meantime, employers should be aware that employees who fall sick before or during a scheduled period of annual leave should be permitted to take the holiday at a later date, even if this means carrying it forward to a new holiday year. Employers should ensure, however, that employees follow the usual procedure for reporting sickness absence, even if they are on holiday. Employees should be required to self-certificate or provide a doctor’s certificate to cover their period of illness, and to attend a return to work interview.
Employment law experts from Steeles Law will be examining this topic in more detail, together with a number of other ‘tricky issues’, in the forthcoming Norfolk Chamber of Commerce HR Forum which is taking place at Dunstan Hall on 12 September 2012, from 2pm. Bookings should be made via the Chamber of Commerce website: http://www.norfolkchamber.co.uk/