Holiday Pay Entitlement During Long Term Sickness
Stringer and Others v HMRC (C-520/06)
Email Update 36
Email Update 36
The European Court of Justice (ECJ) delivered its opinion on 20 January 2009 in the conjoined cases of Stringer and Others v HMRC and Schultz-Hoff v Deutsche Rentenversicherung Bund on the effect of long term sick leave on a worker’s right to annual leave by virtue of the Working Time Directive.
To read the decision for yourself you can click on the following link:
http://www.bailii.org/cgi-bin/markup.cgi?doc=/eu/cases/EUECJ/2009/C35006.html&query=schultz-hoff&method=boolean
The central questions to be determined by the ECJ in this case were:
1. Are workers entitled to take paid statutory holidays while they are off sick?
2. Are employees who have been off sick for part, or all of a leave year entitled to payment in lieu of accrued statutory holidays if the employment relationship terminates?
The ECJ ruled in respect of the two central questions as follows:
1. That it is for Member States (eg the UK Government) to decide whether a worker should be permitted to take annual leave during a period of sick leave. Further guidance will be required from either the House of Lords when the Stringer case is finally decided on its own facts or from the UK Government.
If this is an immediate issue for you contact us and we will provide best advice in relation to your particular circumstances.
2. The European Court of Justice ruled that the right to accrue leave is not extinguished at the end of the leave year, where the worker has been unable to take leave because they have been on sick leave. The employee will either be able to take the annual leave on their return to work, or receive a payment in lieu, if the employment relationship is terminated.
Practical Recommendations
You must ensure that you manage sickness absence effectively and efficiently. If you allow absence to continue for very long periods, then any employee on sick leave will continue to accrue annual leave.
Our best practice recommendation is that you should consider reviewing your contracts, policies and procedures to ensure that they are compliant with the decision in Stringer and that, in particular, any absence management policy is robust.
