Court grants right to compensatory holiday leave in cases of sickness

Workers who fall ill while on annual leave or whose sickness prevents them from taking annual leave have the right to compensatory holiday leave, according to a ruling of the European Court of Justice (ECJ). The ECJ has concluded that neither national laws nor collective agreements can deny an entitlement to deferred annual leave where a worker requests it. The case raises important issues regarding interpretation of the working time directive and also builds on a previous ECJ ruling.

Annual leave provisions

Under Directive 2003/88/EC on the organisation of working time, workers have the right to a minimum of four weeks’ annual paid leave, which needs to be taken during the leave year stipulated. In some workplaces, workers have the opportunity to choose the times when they wish to take their leave, although annual leave is often allocated in advance, either individually or for the workforce as a whole.

Details of court ruling

In Pereda v Madrid Movilidad SA (Case C-277/08), the European Court of Justice (ECJ) ruled on a case brought by a Spanish national working in Madrid. Mr Pereda had been allocated a period of annual leave, as determined under the relevant collective agreement. The agreement stipulated that the works council would submit proposals for leave rotas and that these, once approved by the employer, would be applied. Under this arrangement, Mr Pereda should have taken his annual leave in the period 16 July to 14 August. However, on 3 July, he suffered an accident at work and was ill for all of the allocated annual leave period, except for the last two days. Mr Pereda made a request for substitute leave but this was rejected.

His claim was presented to a Spanish court, which decided to refer the issue of the interpretation of annual leave rights under the working time directive to the ECJ. The Spanish court requested that the ECJ rule on whether the directive had to be interpreted as precluding national provisions or collective agreements that did not give workers the right to substitute periods of annual leave where sickness had prevented them taking the leave.

Right to annual leave takes precedence

The ECJ reviewed the right to annual leave as set out in the working time directive, noting that:

Entitlement to paid annual leave must be regarded as a particularly important principle of Community social law from which there can be no derogations.

In the ECJ’s opinion, the purpose of the right to annual leave is to enable workers to rest and enjoy a period of relaxation and leisure, whereas the function of entitlement to sick leave is to allow the worker to recover from illness. Although substitute arrangements were not obligatory, where the worker made a request for alternative annual leave, the employer had the obligation to comply with the request. The ECJ added in its ruling:

A worker who is on sick leave during a period of previously scheduled annual leave has the right, on his/her request and in order that he/she may actually use his/her annual leave, to take that leave during a period which does not coincide with the period of sick leave.

Furthermore, the ECJ noted that ‘where a worker does not wish to take annual leave during a period of sick leave, annual leave must be granted to him [sic] for a different period’ – this is applicable even if it means that the leave would not be taken in the current annual leave year.

Significance of ruling

The ECJ ruling means that even if the social partners have signed collective agreements which specify how and when annual leave will be taken, their terms may be overruled where individual workers claim substitute annual leave following a period of sickness. The case raises important issues regarding the interpretation of rights under the working time directive, as – in calculating entitlement to leave under the directive – no account can be taken of periods when the worker was certified as sick. It also builds on a previous ECJ ruling in the joint cases of Schultz-Hoff and Stringer, granting the right to carry over annual leave in cases of sickness absence.

Sonia McKay, Working Lives Research Institute

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