The European Court of Justice (ECJ) has ruled that employees who have been on long-term sick leave can take all the paid annual holiday they have accumulated while off work.
Additionally, employees who have been sacked or have left an employer are entitled to pay equal to any time they could not take as leave while they were off work sick.
It has been estimated that the ruling could allow a worker who has been on sick leave for two years to claim up to 40 days of holiday.
The judgement insists that, under the EU Working Time Directive, employees have a right to a minimum period of paid annual leave.
The Court said: “A worker does not lose his right to paid annual leave which he has been unable to exercise because of sickness. He must be compensated for his annual leave not taken.”
But the ECJ also went on to say that employees on long-term sick leave could not benefit automatically from annual paid holiday when they were off work.
Employers’ groups attacked the ruling as likely to hit firms already having to cope with the economic downturn.
Katja Hall, the CBI’s director of policy, said: “Businesses themselves also suffer when staff take sick leave, and we had hoped that a compromise could have been achieved over unused holiday time.
“Instead, at a time when the economy is struggling, this judgment will ensure that staff are away from the workplace for longer, and it will create a headache for HR departments, who will have to review their policies and contracts.”
David Frost, the director-general at the British Chambers of Commerce, commented: “I fail to see the logic behind this decision. With UK businesses facing the most serious economic downturn for at least a generation, this ruling will hit firms hard and at the worst possible time.
“Companies will either be left with the burdensome task of reallocating resource while the accrued holiday is being taken, or they will face a large one-off expense which will undoubtedly damage their cash-flow.”
