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Blow for employers as ECJ confirms ill staff accrue holiday

23 January 2009

A worker's entitlement to annual leave continues to accrue while they are off sick, the European Court of Justice (ECJ) has confirmed.

The blow for employers came in the ECJs much-awaited decision in the case of Stringer and Ors v HM Revenue & Customs.
 
The ECJ concluded that the purpose of the entitlement to paid annual leave under the Working Time Directive (the Working Time Regulations 1998 in UK law) was to enable a worker to rest and enjoy a period of relaxation, whereas sick leave is to enable a worker to recover from illness. One type of leave cannot and does not displace the other.

Therefore, a worker's entitlement to annual leave continues to accrue whilst they are off sick, and they are thus entitled to take this paid, accrued holiday when they return to work.

Although not explicitly stated in the judgment, it would appear that workers returning from a period of sickness absence in a new holiday year would be entitled to take holiday they had accrued whilst were off sick in the previous holiday year.

Furthermore, if a worker's employment ended before they could take their full entitlement, they would be entitled to pay in lieu of the accrued, but untaken, holiday.

The case will now return to the House of Lords, which will have to give a ruling in light of the ECJs decision. This will no doubt be to overturn the Court of Appeal's decision that holiday did not accrue while a worker was off sick.

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