ECJ confirms limits on carrying over holidays due to sickness

The European Court of Justice (ECJ) has confirmed that Member States do not need to allow untaken holidays in excess of four weeks to be carried over into the next leave year when the employee has been on sickness absence.

Under Article 7(1) of the Working Time Directive (WTD), all Member States must ensure that workers are provided at least four weeks of paid holiday per leave year. Additionally, the EU Charter of Fundamental Rights outlines that ‘every worker has the right to limitation of maximum working hours, to daily and weekly rest periods and to an annual period of paid leave’.

Whilst Member States are able to provide more holidays than the four-week minimum specified by the EU, they must make sure these four weeks can be taken. In the UK, the Working Time Regulations 1998 (WTR) outline that workers are entitled to 5.6 weeks of annual leave, incorporating the four weeks as specified by the EU and an additional 1.6 weeks. However, holiday entitlements can get complicated when workers are not able to take their full annual leave entitlement due to sickness absence.

In these situations, previous understanding in the UK has been that workers should be able to carry over some untaken days into the next leave year but are not legally entitled to carry over any days that are in excess of the EU’s four-week provision. Now, a recent ruling from the ECJ has provided further clarity on the law.

The Court heard two cases from Finland. In both situations, employees had been prevented from carrying over leave that was provided by the terms of a collective agreement and exceeded the EU minimum. It had been asked to consider whether the WTD, read in conjunction with the Charter, precluded national laws and collective agreements that limited the carry-over of holidays in the event of sickness to these four weeks.

Ultimately, the Court found that it was left to Member States to decide the conditions for granting or extinguishing additional holiday entitlement. It was also up to Member States to make provisions for carrying over leave not taken due to illness, provided the right to paid annual leave remains at least equal to the minimum period of four weeks.

This ruling from the ECJ therefore confirms that the UK’s current approach is correct. When off sick, workers in the UK are currently able to carry over up to four weeks of untaken holiday due to their absence and are not legally entitled to carry over any additional amount unless such a provision is expressly stated in their contract.

This means that, providing organisations were following the rules before, they should not need to change any of their current procedures. That said, they should always check the terms of the employee’s contract before making any decisions in this area.

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