Pereda v Madrid Movilidad

Workers on sick leave may carry over annual leave into the next holiday year - The European Court of Justice has just reached a decision in the above case which allows annual leave to be taken while an employee is off on sick leave.

If the employee does not wish to take annual leave while off sick it must be granted in a different period which may be outside the current leave period.

P worked for MM and was allocated leave from 6 July to 14 August 2007. He had an accident at work on 3 July 2007 and was unable to work until 13 August 2007. He requested a new period of annual leave as he had been sick during his original allocation. This was refused and P challenged the decision in the Spanish courts who referred the issue to the ECJ.

The Spanish court wanted to know if Article 7(1) of the Working Time Directive allowed a worker in P’s circumstances to use leave on dates different to those allocated, regardless of that holiday year having ended.

The ECJ stated, “…it must be borne in mind that…no derogation is permitted by that directive (and) every worker is entitled to paid annual leave of at least four weeks...Thus, the right to paid annual leave is not extinguished at the end of the reference period laid down by national law where the worker was on sick leave for the whole or part of the leave year and has not had the opportunity to exercise that right.”

This is clearly a logical follow on from the decision in the Stringer case but poses more questions as it clearly conflicts with the Working Time Regulations which only allow for eight days to be carried over, while this judgement provides for all of them to be carried over.

There is currently no indication of how the government plans to react to this judgement, which is actually wider than the question posed by the Spanish courts, though it is clear there will be practical implications for employers.

What Can Employers Do?

Best Practice
This would be to amend policies and procedures now, before the government acts, and allow for 20 days holiday to be carried over if the employee has been unable to take them due to sickness.

However, I would suggest just 20 days to be carried over rather than the 28 provided for by UK legislation as the judgement only refers to paid annual leave under the Working Time Directive rather than the Working Time Regulations, which is the UK law that enacts the Working Time Directive.

This will obviously include those times where the employee is off sick during annual leave, though I do not think it would be unreasonable to ask for medical evidence. Bear in mind that if the employee is off sick for less than seven days a doctor may refuse to provide a sick note; it would be unreasonable to penalise the employee in these circumstances.

Commercial Approach
The Working Time Regulations are still inexistence in their current form until they are amended. The commercial approach would be to carry on under current law though we would have to make it clear that they are potentially open to Employment Tribunal claims in light of this judgement. However, this approach may be cheaper than immediately changing all policies and procedures.