Payroll Software News

European court rules annual leave sickness can be claimed back

Posted by Editorial Team

Personnel who become ill while on paid annual leave are entitled to take the same period of time as their sick leave at a later date, under a new ruling by the European Court of Justice.

This ruling is binding on all European Union (EU) members including Britain and the judgement relates to the EU's Working Time Directive, which guarantees all employees to annual leave.

According to the court report: "The purpose of entitlement to paid annual leave is to enable the worker to rest and enjoy a period of relaxation and leisure."

It went on to state that the purpose of sick leave "is different" and "enables a worker to recover from an illness that has caused him to be unfit for work".

The court added that the point at which the temporary incapacity arose is irrelevant, as it would be "arbitrary and contrary" to the entitlement if the individual was only given leave if they were already ill when their holiday commenced.

As a result, the court claimed employees should be allowed to reschedule their annual leave to a period outside of the corresponding reference period for vacations.

Commenting on the ruling, associate director of policy, research and strategic visibility at the Chartered Institute of Payroll Professionals (CIPP) Karen Thomson said the body is "disappointed" by the outcome.

She claimed the European Union should not be able to legislate on the issue of sickness during holidays.

"Whether an employer allows an employee to reclaim holiday if sick during their leave is a matter to be dealt with between the employer and the employee; not the EU or the UK government," Ms Thomson remarked.

It has been suggested by some experts that introducing the ruling in October, as the government is expected to do, will bring further financial burden on UK businesses.

Ms Thomson claimed the CIPP is in full support of such conclusions and added that the timing is particularly bad as many firms will be unable to afford the cost of covering additional leave.

As well as creating staff shortages, it was claimed the ruling will put extra pressure on payroll and HR departments.

Administrative workloads will increase, as employers will require some form of evidence from workers to show they were genuinely ill.

This would then need to be followed up and holiday and pay charts amended accordingly, Ms Thomson commented.

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