The case on deferment of annual leave which was mentioned during the seminar was Pereda v. Madrid Movilidad SA where the European Court of Justice (“ECJ”) held that employees who fall ill whilst on annual leave must be allowed to take this leave at an alternative time.
The question raised during the seminar concerned the accrual of annual leave and the carry over into the next leave year. The ECJ has ruled in relation to this (as pointed out by a delegate at the seminar) in the case of HM Revenue and Customs v. Stringer, which clarified the following:
- Paid holiday entitlement will accrue during sickness absence no matter how long the employee is absent from work,
- Nothing shall stop an employee from taking annual leave whilst on sick leave (even if the sickness is certified), and
- Where a worker has been prevented from taking their annual leave due to sickness, they must be allowed to take that annual leave at another time, even if it means carrying the entitlement over to the following leave year. If it was not possible to take the accrued leave due to termination, the worker is entitled to payment in lieu.
The problems in the UK
The ECJ decision was subsequently considered by the House of Lords as the problem in the UK (but not Gibraltar though) is that statutory leave entitlement is not permitted to be carried over into the next leave year. Unfortunately for UK employers, the House of Lords did not clarify this issue sufficiently.