Paid Annual Leave – Effect on holiday entitlements of sickness absence during annual leaveWednesday, September 16th, 2009
On 10 September 2009, in a relatively short decision in the case Francisco Vicente Pereda v Madrid Movilidad SA, the European Court of Justice (ECJ) ruled that, where a worker falls sick during paid holiday leave, the worker is entitled to take the paid leave at another time, in the current or next holiday year.
The Madrid Labour Court asked the ECJ a single question, namely:
“Must Article 7(1) of [the Working Time Directive]be interpreted as meaning that when the period of leave allocated in the undertaking’s annual planning of leave coincides in time with a temporary disability following an accident at work which happened before that period of leave began, the employee affected, once he returns to work, has the entitlement to use his leave on dates different from those originally allocated, irrespective of whether the calendar year to which they relate has ended?”
Madrid Movilidad, the company for which Mr. Pereda worked, set his summer holiday period, as permitted by Spanish law, to the period between 16 July and 14 August 2007. Mr. Pereda had an accident on 3 July and was unable to work until 13 August. As a result, he was simultaneously on sick leave and holiday leave for almost all of the allocated holiday period. On his return, he asked his employer to allocate a new period of annual leave in November and December, but this request was refused. He challenged the employer’s decision before the Madrid Labour Court.
The question raised by the Court was worded specifically in relation to Mr. Pereda’s situation, but the ECJ took a broader view of the issues, considering the question in this way:
“Must Article 7(1) of [the Working Time Directive] be interpreted as precluding national provisions or collective agreements which provide that a worker who is on sick leave during a period of annual leave scheduled in the annual leave planning schedule of the undertaking which employs him does not have the right, following his recovery, to take his annual leave at a time other than that originally scheduled, if necessary outside the corresponding reference period.”
Article 7 of the Working Time Directive (WTD) states:
“(1) Member States shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice.
(2) The minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.”
The ECJ noted that:
- as the WTD does not permit any derogations (exceptions) from these provisions, the entitlement to four weeks paid annual leave is absolute,
- the ECJ, in its decision in the Schultz-Hoff/Stringer cases, had already ruled that entitlement to paid holiday leave is not lost where a worker has been unable to exercise that right due to sickness absence (see link below), and
- holiday leave and sick leave have different purposes.
As a result, the ECJ’s answer to the Spanish court’s question is as follows:
“Article 7(1) of [the Working Time Directive] must be interpreted as precluding national provisions or collective agreements which provide that a worker who is on sick leave during a period of annual leave scheduled in the annual leave planning schedule of the undertaking which employs him does not have the right, after his recovery, to take his annual leave at a time other than that originally scheduled, if necessary outside the corresponding reference period.”
The effect of the decision, therefore, is that a worker who is on sick leave during a period of previously scheduled annual leave has the right to request and take that leave during a period that does not coincide with a period of sick leave. The employer is obliged to grant a different period of annual leave, even if that requires the leave to be taken in the next holiday year.
How does the decision affect employers? The decision is only about paid annual leave so existing statutory and contractual rules relating to self-certification of incapacity for work and the production of doctor’s statements are not affected. Workers who are already on holiday should be required to meet the same conditions to qualify for statutory or contractual sick pay as workers who are at work and, in order to minimise abuse, it would be sensible to apply to qualification rules rigorously.
Also, this ECJ decision applies only to paid annual leave entitlement under the European Working Time Directive, namely to four weeks in a holiday year. The additional 1.6 weeks is a requirement of domestic legislation and there is currently nothing in the UK’s Working Time Regulations to prevent an employer refusing to rearrange holidays once a worker has already taken four weeks paid leave in the holiday year.
There are also implications for payroll processing, where a worker is paid one or two weeks’ holiday pay in advance and then becomes entitled to SSP during the holiday period. There is no problem if the worker is not interested in arranging new holiday dates as the holiday pay will more than adequately cover the employer’s liability to pay SSP. But if some or all of the holiday period has to be changed to sick leave, there will be messy wage recovery requirements.
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