In June 2012, the European Court of Justice made a ruling that holiday illness is now to be classed as sick leave.
As a result, any of your workers who fall ill during pre-booked annual leave are entitled to take corresponding paid leave at a later date. In other words, any period of annual leave that is interrupted by illness should not be counted as annual leave, but as sickness absence instead. This will apply whether your employee becomes ill before or during the period of pre-booked annual leave.
The ruling relates to the European Union’s Working Time Directive, which the UK has to comply with in relation to sick pay and annual leave. Whilst the decision does not have a direct effect for private businesses in the UK until the Government implement the changes, which it has said it will do from October 2012, Employment Tribunals may well look to give a purposive approach to their rulings from now on in order to comply with this European Court of Justice ruling.
What were the main European Court of Justice findings?
The case before the European Court of Justice was a Spanish trade union case against a group of department stores (ANGED v FASGA). They set out the following propositions:
- The entitlement to paid annual leave is an important principle of European Union law enshrined in the Charter of Fundamental Rights of the European Union.
- So, the right to annual leave cannot be interpreted restrictively. In fact, it would be “arbitrary and contrary to the purpose of entitlement to paid annual leave” to deny workers extra annual leave equivalent to the time they were ill on holiday.
- That is because annual leave and sick leave have different purposes; the purpose of annual leave being to enable rest, relaxation and leisure, whilst sick leave is designed to aid recovery from an illness that prevents an employee from working.
- As a result, a worker who is sick during scheduled annual leave has not benefitted from the purpose of that leave and so has the right to take it at a different time.
- In cases where workers fall sick towards the end of the holiday year and are unable to take all of their annual leave that year, they can, under EU law, carry over their unused leave into the next holiday year.
- Furthermore, employees on long-term sick leave have the right to accumulate at least a year of unused annual leave. However, the European Court of Justice did say that this amount is not open-ended and member states (including the UK) can set an upper limit.
Whilst this might be an unwelcome development for business owners with the Government suggesting it will costs employers over £100m a year, it is vital that you comply with these changes as an employer.
If you do not, you may find yourself facing Employment Tribunal claims by disgruntled employees.
For a confidential chat about how you need to address these changes, please contact our Employment & HR team on 01332 226 149.