Europe rules employees accrue holidays while on long-term sick leave

The European Court of Justice (ECJ) has ruled that employees on long-term sick are entitled to take all holiday they have accumulated.

Judges ruled that under the Working Time Regulations, holiday continues to accrue while an employee is off sick, bringing a long running saga over holiday accrual closer to a conclusion.

The ruling in the case of Stringer and others v HM Revenue and Customs means employees can accrue statutory holiday pay while off sick, receive payment in lieu of unused holiday entitlement at the end of the employment and carry over any unused holiday at the end of the year.

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Deborah Healy, employment partner at Beachcroft, warned: “Today’s decision is likely to cost employers dearly. As there is no restriction on carry over, this may include several years worth of unused settlement.”

The case will now return to the House of Lords, who will decide if UK employers may stipulate that employees must return to work before claiming holiday, or be allowed to take the holidays while on sick leave.

Philip Titchmarsh, employment partner at Pinsent Masons said: “The Court of Appeal in England has previously said that this is not allowed – you are either off sick or on holiday; an employee can not take holiday while off sick. The ECJ has decided that, whether it is is allowed or not, is a matter for our national courts to decide.”