On 24^th January 2008 the Advocate General delivered his opinion on the case of Stringer & Others v HM Revenue & Customs (the case previously being known as Ainsworth v HMRC).

To recap, in April 2005, the Court of Appeal held that the right to a 4 week statutory paid holiday as it then was, under the Working Time Regulations 1998 does not continue to accrue whilst an employee is off on long term sick leave, which was defined as being 12 months or more.  This could mean that an employee could no longer benefit from paid holiday, as the right to that holiday did not accrue during long term sickness absence.

It had been the practice before, to actually pay someone on long term sick the equivalent of his or her holiday pay during the course of that sickness. 

The employees in this case, not unsurprisingly appealed the Court of Appeal decision to the House of Lords, which in turn referred the question to the European Court of Justice. 

The EU Directive on annual leave states that member states shall take the measure necessary to ensure that every worker is entitled to paid annual leave of at least 4 weeks in accordance with the conditions for entitlement to, and granting of such leave laid down by national legislation and/or practice.

The minimum period of paid annual leave may not be replaced by an allowance in lieu, except when the employment relationship is terminated.  This is reflected in UK law by the Working Time Regulations 1998 (as amended). 

The conclusion of the Advocate General is that the existence of the right to paid annual leave cannot be made subject to a worker’s capacity for work.  Therefore, in principal, a worker rendered incapable of work through illness, has a corresponding right to annual leave, but that he may not take this leave during the period in which he is otherwise on sick leave.

As to whether or not the worker can be paid for the holiday not taken during the period of sick leave, the Advocate General’s opinion is that where an employment relationship is terminated, workers are in any event entitled to a compensatory payment as a replacement for leave which has been accrued but not taken due to illness (allowance in lieu).  This is also the case where the worker was on sick leave for all or part of the leave year in question.  When assessing the amount of this entitlement, it is necessary to ensure that the amount of the allowance in lieu that the worker receives is equivalent to that of his normal pay.

For more information call Employment Law Advisory Services on 0161 785 2000 or visit www.employment-law.uk.com