Mark Ellis Blog

Just when UK plc is busy fighting its own economic Battle of Waterloo what does the European Court of Justice (ECJ) do? Does it send in the elite ECJ economic crack troops, “Prussian reinforcements under Blucher stylee” ,at the final hour and help strike the decisive blow against the rear echelons of the economic recession? No! The ECJ militia rabble eventually turn up at the wrong battleground and when they finally stumble across the chaos and smoke at Waterloo they open up fire upon their Allies.!!

Employers throughout the UK must be banging their collective heads against the nearest hard fixture in response to the latest collective outpouring of lunacy from the ECJ in relation to holidays and the Working Time Regulations.

Given the current economic climate, the last thing UK employers wanted was an ECJ Artful Dodger creeping up on them in the economic recession hustle and bustle and relieving them of the silver pocket watch heirloom and increasing employment costs. Unfortunately, the recent European Court of Justice’s decision in Stringer and Others v HM Revenue and Customs, does just that.

In a nutshell, the ECJ amazingly held that workers on long-term sick leave accrue statutory annual leave throughout the sickness period and have to be paid for it at their normal rate of remuneration, even if their sickness persists for the whole of the relevant leave year. Furthermore, where sickness absence means that accrued leave is not taken by the time employment is terminated, the worker must be given a payment in lieu at his or her normal rate of pay.

So, in short an employee can be off sick for 11 months, return to work and then pretty much take the next month off on full holiday pay. Even worse an employee could potentially be off for the full calendar year and roll over their full holiday entitlement into the next year, 56 days holiday! On the face of it, the ECJ logic that the Working Time Regulations entitle an employee to paid holidays and a break from the rigours and demands of work, whereas a sickness period is in its purest form is not a “holiday,” seems sound in principle. But where the logic is seriously flawed is that the real truth is that many employees on long term sickness have periods of rehabilitation involving holidays, days away with families etc. How these periods of “rehabilitative holiday” differ from “normal holidays under the Working Time Regulations” is difficult to square. 

Another problem is that the ECJ judgment suggests that employers must allow workers on long-term sick leave to carry over their unused leave entitlement into the following leave year. However, Reg 13(9)(a) of the WTR expressly provides that the basic four weeks’ leave (but not the additional leave under Reg 13A) may only be taken in the leave year in respect of which it is due. In other words, the Working Time Regulations specifically prohibit carry-over.

Until the House of Lords gives judgment, the position will remain uncertain. We would suggest that the safest course for employers is to permit workers on long-term sick leave to take a notional period of paid annual leave before the expiry of the current leave year.