For many, the holiday year is coming to an end on 31 December. A recent case has helped to clarify the position of carry-over of holidays when an individual is too unwell to use them in the current leave year.

Holiday entitlement for workers in the UK is derived from both EU law and domestic (UK) law.

Under the Working Time Directive (EU law), workers are entitled to four weeks’ statutory holiday leave each year. The UK provides more generous provisions than this and the Working Time Regulations 1998 (UK law) give workers an additional 1.6 weeks’ holiday leave per year, meaning that most workers in the UK are entitled to a minimum of 5.6 weeks’ holiday each year. This is the equivalent of 28 days per annum for a full time worker, which includes bank holiday entitlement.

But what happens when a worker is prevented from taking their holiday entitlement during the leave year due to sickness absence? Is the employer obliged to carry over unused annual leave from one leave year to another in this instance and if so, should it be the 4 weeks (EU) leave or 5.6 weeks (UK) leave?

Two recent European Court of Justice (ECJ) cases have helped to clarify these points.

The combined Finnish cases of TSN v Hyvinvointialan liitto ry and AKT v Satamaoperaattorit ry concerned an employee in the Finnish health sector and one in the Finnish freight transport sector. In each case, under sector-specific collective agreements they were each entitled to more than the four weeks’ annual leave provided by the Working Time Directive (in one case five weeks, and in the other, seven weeks).

In each case, both employees took a period of sick leave which prevented them from taking their full contractual annual leave entitlement during the year in which it had accrued. Each asked their respective employer to carry over their annual leave, which they had been unable to take, into the following year. Both of their requests were refused in respect of the paid annual leave which exceeded the minimum four weeks’ leave period.

Both employees brought claims alleging that this refusal breached EU law.

The ECJ noted that the Working Time Directive does not prevent individual EU member states from granting workers’ rights to more annual leave than the four weeks provided by EU law. However, any such annual leave which exceeds the four weeks is governed exclusively by national law, and not by EU law.

As a result, the ECJ concluded that member states continue to have the freedom to grant (or not to grant) the right to carry over some or all of those additional days where the worker has been prevented from taking holiday due to sickness absence.

The ECJ went on to conclude that the mere fact that domestic provisions come within an area in which the EU has powers cannot bring these measures within the scope of EU law.

The ECJ’s decision in these cases will therefore come as welcome confirmation that UK employers do not need to carry over holiday leave which exceeds the four week entitlement under EU law in cases of sickness absence, unless they wish to agree with their employees otherwise. However, employees should be reminded of their right to take annual leave and that they will lose their entitlement to do so if it is not taken within the relevant holiday year to ensure that there can be no argument that the employer prevented them from taking leave.

If you would like any further information, please contact Kathryn Moorhouse on 0113 280 2231 or kathryn.moorhouse@luptonfawcett.law or another member of the Employment Law team.

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

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