The Advocate General's opinion is not binding, but is mostly
followed by the European Court of Justice (ECJ), which will later
rule on the case involving employees and the UK HM Revenue &
Customs (HMRC).
Employees who were on sick leave took employment tribunal claims
against HMRC to assert their rights to take leave or, in the case
of those who had since been dismissed, be paid in lieu of leave.
Their claims were made under the Working Time Regulations.
Though the claims were upheld by the original tribunal, the
Court of Appeal rejected them. When the case reached the House of
Lords, they asked the ECJ to interpret the Working Time Directive,
from which the Regulations came.
Advocate General Verica Trstenjak has said that workers should
be allowed both the holiday entitlement for the period during which
they were sick and payment in lieu of it if they had been
fired.
Trstenjak said that there must be no confusion between sick
leave and holiday, and that the two must never run concurrently.
"Sick leave and annual leave serve different purposes and therefore
must not, for legal purposes, be regarded as interchangeable," she
wrote.
The ruling will not be welcomed by employers, said Catherine
Barker, an employment law specialist at Pinsent Masons, the law
firm behind OUT-LAW.COM.
"This is disappointing for employers because it will potentially
increase the cost to employers of keeping the long-term sick on
their books," she said. "But it could also be bad news for
employees because it could lead to employers looking to limit their
liability in sickness cases by terminating employment more quickly
than they otherwise would, even if absent for genuine incapacity
reasons."
The opinion says that there is a basic right to paid leave, and
that it cannot be taken away by illness. "The existence of the
right to paid annual leave cannot be made subject to a worker’s
capacity for work and therefore in principle a worker rendered
incapable of work through illness has a corresponding right to
annual leave," wrote Trstenjak. "However, he may not take this
leave during a period in which he is otherwise on sick leave."
In a second case ruled on by the Advocate General from the
German courts, Trstenjak said that any leave built up cannot be
cancelled just because the end of an administrative year
passes.
"Employees will be able to take holiday leave even if it means
taking it in a subsequent leave year," said Barker, explaining the
opinion. "In addition, if an employee's contract is subsequently
terminated he will be entitled to be paid in lieu of leave which
has accrued but not been taken during sick leave. It is not
entirely clear whether that extends to any untaken holiday carried
over from a previous leave year – although this would seem to be
the suggestion from the opinion."
"The Advocate General's view is that it will be equally
important for an employee to have a paid period of rest period
between jobs if he or she has been unable to take advantage of this
whilst still employed, due to illness or injury," said Barker.
Another unclear point is how far the opinion can go, said
Barker. "It is not clear from the Advocate General's opinion
whether there is any limit on the right to take holiday once the
worker is fit to return to work or to be paid in lieu if the
employment has terminated," she said. "For example, can a worker
who has been on long term sick leave for two years take two years'
worth of statutory annual leave when they return to work from sick
leave? Are they entitled to pay in lieu of that holiday if the
employment is terminated?"
"If the full European Court does follow this opinion I think
that employers will need to become more proactive in managing
long-term sickness absence rather than letting employees, who may
never even return, fester on the payroll indefinitely," said
Barker. "If there is no limit on the number of years' annual leave
entitlement that can be carried over or be paid in lieu of,
employers may have to consider whether they can limit their
liability by terminating employment sooner rather than later –
although in doing so they will need to take care not to fall foul
of disability discrimination and unfair dismissal laws."
