Long term sick leave & the expiry of untaken holiday
18 July 2011
The Advocate General (AG) has handed down an Opinion stating that holiday entitlement for workers on long-term sick leave, may expire 18 months after the end of the holiday year.
This involves a German case, KHS AG v Schulte (2011). Mr Schulte had been on long-term sick leave for over 6 years (!). Following termination of his employment, he brought a claim for payment in lieu of untaken annual leave that he had accrued whilst off sick. His former employers argued that his holiday entitlement had expired.
The German court referred the matter to the ECJ, as it was unsure whether it was lawful under the Working Time Directive for the holiday rights of those on long-term sick leave to expire. The court`s uncertainty relates to an earlier ECJ case (also German), Schultz-Hoff v Deutsche Rentenversicherung Bund which has been interpreted as requiring unlimited carry-over and accumulation of untaken holiday for those on long-term sick leave.
The AG rejected this interpretation of Schulz-Hoff. In the AG Opinion, the Working Time Directive does not require unlimited accumulation of annual leave whilst off sick. An acceptable limit on the accumulation of holiday rights (and the right to payment in lieu on termination) could be set by Member States. The AG considered that the expiry of annual leave entitlement 18 months after the end of the leave year, provided under German law, would be sufficient.
A definitive ruling on this matter is now awaited from the ECJ, which is not obliged to follow the AG Opinion. Conflicting case law means that until then, the situation in the UK remains unclear and employers are recommended to take advice on any particular case.
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