6th July 2012

Pulling your Sickies in the Sun

The relationship between sickness and annual leave has been the subject of considerable litigation over the years in the European Court of Justice (“ECJ”).  The ever-increasing list of cases on this topic grew again this week when the ECJ handed down its judgment in Asociación Nacional de Grandes Empresas de Distribución (ANGED) v Federación de Asociaciones Sindicales and ors (“ANGED”). 

The ECJ has previously ruled that a worker who falls sick during a period of previously scheduled annual leave has the right to request to reschedule the annual leave to a time when he or she has recovered (Pereda v Madrid Movilidad SA).  The ECJ in Pereda also ruled that the normal rule preventing workers from carrying leave forward from one leave year to another should be relaxed if the business needs prevent the employee from rescheduling any holidays lost due to sickness in the same leave year. 

In ANGED the ECJ held that the EU Working Time Directive (No.2003/88) requires a worker who is sick during a period of annual leave to be allowed to interrupt the annual leave and take it at a later date irrespective of whether the sickness commenced before or during the annual leave.

This case concerned various Spanish trade unions who raised actions seeking declarations that workers were entitled to postpone paid annual leave where it coincided with sick leave.  These claims were upheld by the Spanish High Court.  However, on appeal, the appeal court referred the claims to the ECJ seeking guidance on whether Article 7(1) of the Working Time Directive required a worker to be permitted to interrupt a period of annual leave if he or she is temporarily incapacitated so that the leave which is lost due to illness can be taken at a later time.

The ECJ stressed that the right to paid annual leave is a “particularly important principle of EU social law from which there can be no derogations”.  The purpose of paid annual leave is to enable workers to rest and enjoy a period of leisure.  The purpose of sick leave is to enable a worker to recover from an illness that has caused him to be unfit for work.  There are clear distinctions between the two.

The ECJ also held that the stage at which the period of sickness arose is irrelevant. A worker is entitled to take paid annual leave which coincides with sick leave at a later time, irrespective of the point at which the incapacity for work arose.  The court concluded that it would be arbitrary and contrary to the purpose of paid annual leave to allow a worker to take annual leave at a later date only if he was already unfit for work when the period of paid annual leave commenced.

Importantly, the ECJ stated that the Working Time Directive must be interpreted as precluding any national provisions which provide that a worker who becomes unfit for work during a period of paid annual leave is not entitled to reschedule the paid annual leave which coincided with the period of sickness. 

The decision results in various practical implications for employers who might quite rightly have concerns about whether this system is open to abuse by employees.  Imagine an employee who returns from holiday abroad looking well tanned but claiming to have been unwell.  Employers should certainly have rigid absence management procedures in place to cover this situation.  Employees should be notified of the procedures.  Should an ill employee phone their employer to notify them of the illness (as would be usual in a normal absence situation)?  What if the employee is in a different time zone?  Further issues are likely to arise in respect of evidencing the illness.  For instance, would a self-certification be credible for absences of under the normal 7 days which require GP certification?  Surely employers would not be unjustified in insisting on some form of medical evidence. 

The system is perhaps even more open to abuse in cases where employers offer attractive contractual sick pay schemes.  If employers only pay Statutory Sick Pay for periods of absence, they should remember to only pay an employee who falls ill during holiday SSP for those days (as opposed to contractual holiday pay).  Imagine an employee who is ill for five days during a week’s holiday and seeks to reclaim the holidays.  The employee would only receive SSP for two days of that period because SSP is only payable for absences in excess of three days.

Having regard to the clear distinction between the legal treatment of annual leave and sick leave, it is easy to understand the logic of this decision.  The practical implications however are unlikely to be so straight forward. 

Jack Boyle
Solicitor – Employment

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