Annual Leave and Sickness

Mon, 09 Jul 2012

By Mugni Islam-Choudhury
Can annual leave be postponed when it coincides with sickness? 
 
In Perada v Madrid Molividad SA [2009] IRLR 959, the employee had an accident at work before scheduled annual leave, requiring a lengthy convalescence during the time when he would have been on annual leave. The European Court of Justice held that under the EU Working Time Directive (Directive 2003/88) a worker was allowed to defer a period of scheduled annual leave when he was on a period of sick leave before that annual leave took place. Does the same principle apply when an employee is sick on holiday? The European Court of Justice looked at this question in the case of Asociación Nacional de Grades Distribución (ANGED) v Federación de Asociaciones Sindicales (FASGA) [2012] ECJ 21/06/2012.
 
Facts
 
In ANGED a number of Spanish trade unions sought a declaration from the Spanish High Court that workers were entitled to postpone paid annual leave when it coincided with sick leave. The High Court upheld the claim. On appeal, the matter was referred to the European Court of Justice, as to the correct interpretation of the EU Working Time Directive.
 
Decision 
 
The employers argued that workers affected by a temporary incapacity for work before starting a pre-arranged period of leave, or who are affected during that period of leave, are not entitled to take leave at a later date, after the period during which they were unfit for work has ended, except in situations expressly provided for in the collective agreement (these exceptions mainly relating to childbirth, adoption and pregnancy). 
 
The ECJ rejected this argument and pointed to these factors:
 
a)    The entitlement to paid annual leave was an important principle of European Union social law.
b)    ECJ case law had established that the right to paid annual leave should not be interpreted restrictively. 
c)    Applying the rationale of Pereda, it was common ground that the purpose of entitlement to paid annual leave is to enable the worker to rest and to enjoy a period of relaxation and leisure. The purpose of entitlement to sick leave is different. It is given to the worker so that he can recover from an illness that has caused him to be unfit for work.
 
In applying these principles, the ECJ expanded the scope of Pereda, stating that it was not limited to cases where the sick leave arose prior to the scheduled annual leave, as the timing of sick leave against annual leave was irrelevant to the basic principles as set out in (a) to (c) above. In that context, the Court held that the new period of annual leave – corresponding to the duration of the overlap between the period of annual leave initially scheduled and the period of sick leave – to which the worker is entitled after he has recovered may be scheduled, if necessary, outside the corresponding reference period for annual leave. In other words, it need not necessarily be taken in the same holiday year. 
 
Analysis
 
The EU Working Time Directive has been enacted into UK law through the Working Time Regulations 1998, and so this decision is binding on the UK. 
 
This decision applies only to statutory annual leave, as opposed to contractual annual leave which could be more generous. In relation to contractual leave, the question will depend on the express or implied terms of the contract. Furthermore, as many workers in the UK have no more than statutory leave, this decision will have wide impact in the UK. It is another employee-friendly decision of the ECJ, which will require a review of annual leave policies. 
 
Presently, most employers have only allowed a deferral of annual leave on facts similar to Pereda – i.e. if the employee is ill before scheduled annual leave so as not to be able to take that leave. However, the scope of ANGED is much wider – if a worker is on holiday for two weeks and is ill for three days in the middle of it, it appears that the employer will now have to allow the employee to take those three lost days at a later date. From an employee’s perspective, it allows workers to get back days lost to sickness when on holiday. From the employer’s perspective, this deferral will be notoriously difficult to police, and is potentially open to abuse. 
 
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