Working time case law
Case law basckground relating to working time legislation
The interaction of annual leave and sick leave
In the two cases of Stringer and Pereda, the European Court of Justice (ECJ) ruled on the interaction of sick leave and paid annual leave under the Working Time Directive.
As a result of the ECJ ruling in Stringer:
- statutory entitlement to paid annual leave continues to accrue during sick leave, even if the employee is on sick leave for the whole year and does no work
- workers can take their statutory annual leave at the same time as sick leave and receive their normal rate of pay
- payments in lieu of leave upon termination of employment must include any untaken statutory annual leave even if the employee has been on sick leave for the whole of the leave year
The Stringer case then returned to the House of Lords. The practical effect of its judgment is that a worker may be able to make a holiday pay claim under the deduction from wages provisions of the Employment Rights Act 1996, not just under the Working Time Regulations 1998.
In the case of Pereda the ECJ ruled that where a worker fell sick shortly before pre-arranged annual leave, the worker can request to take the period of annual leave which overlapped with sickness as annual leave at a later date. The ECJ ruled that a worker who has been on sick leave for the whole or part of the leave year and has not had the opportunity to take the leave, must be allowed to carry-over that leave into the next leave year.
The combined effect of the rulings is that a worker can chose to take their statutory annual leave at the same time as sick leave, or the worker can chose to take the missed annual leave at a later date. A worker who has missed out on statutory annual leave due to sickness, may be able to carry-over the missed leave to the next leave year.
BIS will be consulting on possible amendments to the Working Time Regulations in light of the ECJ ruling.
Guidance for employers
If you are an employer and you would like more guidance visit businesslink.gov.uk
buisnesslink.gov.uk guidance on working time and time off
Guidance for employees
If you are an employee or worker and you would like more guidance visit Directgov.
Directgov guidance on working time
Rolled-up holiday pay
Following an ECJ judgment on 16 March 2006 and more recent judgments in UK courts, rolled-up holiday pay (RHP) is considered unlawful and payment for statutory annual leave should be made at the time when leave is taken.
UK court judgements about rolled-up holiday pay
Robinson-Steele v PD Retail Services, Clarke v Frank Staddon Ltd, Caulfield & Others v Hanson Clay Products Ltd (formerly Marshalls Clay Products Ltd), 16 March 2006
