In December 2006, the House of Lords remitted to the European Court of Justice (ECJ) certain questions concerning the European Working Time Directive, regarding paid annual leave for employees on long-term sick leave. The Working Time Regulations 1998 (WTR) implement the Working Time Directive in the UK.

The Advocate General (AG) has now handed down her preliminary opinion in the case of Stringer & Others v HM Revenue and Customs, which concerns employees who had been off work for substantial periods without pay but who remained employees, for example on account of long-term sickness.

The Court of Appeal had ruled, in a unanimous decision, that the right to four weeks’ statutory paid holiday under the WTR does not continue to accrue whilst an employee is absent on long-term sick leave. The decision only referred to employees who are absent for an entire holiday year and was based on the argument that leave cannot be taken by someone who is not at work. In addition, the holiday entitlement under the WTR is designed to ensure that minimum health and safety standards apply to working time. If an employee is not at work, he or she cannot derive any health benefit from taking leave.

In the AG’s opinion, however, ‘sick leave and annual leave serve different purposes and therefore must not, for legal purposes, be regarded as interchangeable’. The right to annual leave is a fundamental right and this cannot be taken away by illness. Therefore, the entitlement to paid holiday does accrue while an employer is absent on sick leave. However, a worker may not take this holiday whilst still on sick leave, but only on their return to work.

In addition, if the employment contract of a worker on long-term sickness leave is terminated, he or she is entitled to payment in lieu of accrued holiday leave untaken, even if they have been on sick leave for all of the relevant holiday year.

This opinion is not binding and it remains to be seen whether the ECJ will support the AG’s view.

Says Yair Cohen, “If the ECJ does follow this preliminary opinion, it could prove costly for employers. We can advise you on managing long-term sickness without falling foul of the law.”

This publication contains information which is intended for general guidance only. The information is provided in a concise form and is not substitute for obtaining legal advice. If you would like advice specific to your circumstances, please contact us.