Reclaiming holiday due to illness

A recent European Court of Justice (ECJ) ruling on reclassifying holidays as sick leave could be costly for employers.

Facts
A Spanish firm employed Mr Vicente Pereda. He booked four weeks’ holiday. He subsequently suffered an industrial accident that meant he was off work on sick leave for six weeks; overlapping his booked annual leave. On returning to work, he asked his employer to allocate him a new period of paid annual leave because he was ill during the booked leave.

His employer refused his request explaining that Spanish employment law allowed it to count the four weeks' holiday as part of his annual holiday entitlement despite him being ill in that period. Mr Pereda took legal action and the case was referred to the ECJ. He argued that workers have the right under Article 7(1) of the Working Time Directive (which, in the UK, is implemented by the Working Time Regulations “WTR”) to ask for leave to be reallocated if it has been affected by sickness or injury. He claimed he should have been permitted to take his leave at a different time or, if necessary, for it to be carried forward into the next leave year.

ECJ’s decision
The ECJ re-affirmed the right of every worker to paid annual leave of, at least, four weeks every year. Further it held that Mr Pereda had a right to be granted annual leave at a different time if he had been sick when he was on holiday. The ECJ explained that:

"...the purpose of the entitlement to paid annual leave is to enable the worker to rest and to enjoy a period of relaxation and leisure. The purpose of the entitlement to sick leave is different. It is given to the worker so that he can recover from being ill ... a worker who is on sick leave; during a period of previously scheduled annual leave has the right, on his request and in order that he may actually use his annual leave, to take that leave during a period which does not coincide with the period of sick leave.”

The scheduling of that new period of annual leave is subject to the rules and procedures of national law. However, in respect of the holiday period (in the UK the WTR provide for 28 days for full-time staff) the employer must give the worker a different period of annual leave if the worker was unable to take this leave because of sickness. This period could even be within the next annual leave period i.e. the year following.

Comment
Potentially this could have a significant effect for employers and may require some amendment to sickness policies and procedures. However, what salary is granted during sick leave will depend on the individual's contract. Overall the employer will be in the same position as if the sickness absence falls outside of any booked holiday.(Holiday pay is accrued during sick leave - see our Insight dated 19 June 2009). Employers may wish to require workers to provide suitable medical evidence for sickness absence when on annual leave before granting any request to reclassify part or all of the worker’s holiday as sick leave. This may not be straightforward if the worker is away from home when the illness or injury occurs and there is the process for self-certification of sick leave.

Employers can also clarify what happens in respect of any holiday allowance they give that exceeds the WTR level.

It might be reasonable to request evidence in appropriate circumstances on a case-by-case basis, however care will be needed especially in the context of workers suffering from a disability for whom such requests may be more common.