European court rules that sick workers are entitled to full holiday pay

One of Europe’s highest courts ruled last week that workers on long-term sick leave are entitled to paid holidays. The European Court of Justice (ECJ) ruled that all workers are entitled to the statutory minimum of four weeks of holiday pay for each year they are on sick leave. This is an area which had caused confusion and uncertainty and this decision clarifies the law.

The decision means that a worker returning from one year’s sick leave will be entitled to four weeks paid holiday carried over from the previous year in addition to any holidays they are entitled to for the coming year.
It also means that an employee who quits or loses their job while on sick leave is entitled to a lump sum payment in lieu of holidays accrued but not taken while they were sick, on top of any redundancy or termination payment.

However, lawyers warned that the ruling could be costly for businesses at a time when they are already struggling to fulfill their existing obligations to employees.

Susan Owens, Employment Solicitor at hc solicitors LLP, said: "The decision will have serious financial and practical consequences for employers across the UK. In these difficult times, further obligations could prove too much for some businesses already struggling to keep up with existing requirements.”

Susan Owens also said that the UK's working time rules would need to be amended in light of the judgment and many employers may also need to change their policies on accruing and taking holiday. It should be noted that the ruling applies only to statutory holiday and not to contractual holiday exceeding the statutory minimum, where a stricter approach could be taken by the employer.

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This article has been prepared for general interest and information purposes only; it does not constitute legal advice and should not be relied on as such. While all possible care has been taken in the preparation of this article, no responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by the firm or the authors.