The Court of Justice of the European Union (CJEU) has recently handed down some long-awaited clarity on whether employers are obliged to permit staff to carry over annual leave from one leave year to another when they have been absent due to long-term sickness.
Workers in the UK are entitled to 5.6 weeks’ (28 days) paid holiday in each leave year, broken down as follows:
- Four weeks’ (20 days) paid holiday provided for under the EU’s Working Time Directive (WTD), known as ‘basic leave’
- 1.6 weeks’ (eight days) paid holiday provided for under the UK’s Working Time Regulations (WTR), known as ‘additional leave.
Under the WTR, the 20 days’ leave derived from EU law must be taken in the current holiday year, however, the WTR provide a limited potential right of carry-over in respect of the additional eight days’ leave, in accordance with the contract of employment. Furthermore, an employer may set its own carry-over rules for any leave in excess of the 28 days.
This issue has historically caused problems for workers on long-term sickness absence who effectively lost their holiday entitlement, so the courts decided that it should be permissible for workers to carry over their annual leave if it was lost due to a period of sickness or maternity leave. However, it was not clear whether this decision applied only to the four weeks’ basic leave entitlement provided for under EU law or also included the full 5.6 weeks’ granted under UK law.
Decision
The CJEU has now confirmed, in the Finnish case of TSN v Hyvinvointialan, that where an employee is off on long-term sickness leave and unable to take their full holiday entitlement, the 20 days’ holiday under EU law must be carried over to the subsequent holiday year.
However, any additional entitlement, such as the eight days under UK law, and any extra holiday provided for in the employment contract, must only be carried over if it is required under the relevant domestic law provisions or the employee’s contractual terms.
This decision confirms that, in the absence of any contractual provision, UK employers only need to allow staff on long-term sickness to carry over four weeks’ annual leave into the next leave year.
For more information on long-term sick leave and holiday entitlement, please contact our Employment Team on 0345 656 0406 or fill in our online enquiry form and a member of our Team will be in touch.