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Employees can retrospectively switch annual leave to sick leave, rules ECJ
16 September 2009
Employees who cannot take their holiday entitlement because of
sickness, or who are sick during their holiday, must be
allowed to take their holiday at some other time, the European
Court of Justice (ECJ) has ruled.
The ECJ’s decision follows the Stringer case earlier
this year where the court ruled that an employee who could not take
annual leave due to continuous sickness absence could carry their
holiday entitlement over to the next holiday year under the working
time directive. However, it did not tackle the issue of what
happens if sickness absence coincides with planned annual leave
which was the subject of the case Pereda v Madrid Movilidad
SA.
The facts of the case
In the case of Pereda v Madrid Movilidad SA, Mr Pereda
was scheduled to take holiday but was involved in an accident
shortly before it was due to start and was subsequently unable to
work. He asked for a new period of annual leave but his employer
refused.
What was the ECJ asked to consider?
The ECJ was asked whether, when a period of annual leave
coincides with a temporary disability following an accident at
work, the employee may change his period of leave, if necessary, to
another leave year.
And the decision?
The ECJ ruled that an employee on sick leave during a period of
previously scheduled annual leave has the right, on request after
returning from the absence, to take that annual leave at another
time. If the employee cannot take this re-scheduled leave in the
particular leave year, they are entitled to carry that forward
into the next leave year.
The ECJ’s rationale was that the purpose of annual leave - “to
rest and enjoy a period of relaxation and leisure” - was different
from the purpose of sick leave - “to recover from being ill”.
Implications?
The decision as to whether annual leave is taken during sick
leave is now one for the employee, not the employer – if the
employee does not wish to take annual leave whilst off sick, that
leave must be granted at another time. This can include a request
to take the leave in a subsequent leave year and could therefore
mean annual leave accrues over a number of years.
Employees may then take this accrued leave on their return to
work or receive payment in lieu on the termination of their
employment, which may lead employers to consider earlier dismissal
than at present to avoid the accrual of annual leave.
It appears that Mr Pereda applied for a new period of annual
leave over a month after his return to work. If this is correct,
employees would not need to cancel their booked annual leave if
they become sick, but could exercise their right to reschedule that
leave at a later date.
This may make little difference to those employers who do not
pay more than statutory sick pay, or only do so for a limited
period. Employees of such employers probably would not want to
switch annual leave to sick leave. However, employers with generous
sick pay schemes are likely to see an increase in retrospective
claims of illness while on holiday, which in many cases may be
unverifiable.
As a result, employers may consider reviewing their sick pay
schemes and may wish to revisit their sickness absence policies to
require notification of any sickness absence whilst an employee is
on holiday and/or to require a doctor’s certificate in these
circumstances.
If you would like to read our previous bulletin on the
Stringer case, please click here.
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general interest and information. It contains only brief summaries
of aspects of the subject matter and does not provide comprehensive
statements of the law. It does not constitute legal advice and does
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