212: Employers only required to carry-over four weeks’ holiday for sickness absence

The European Court of Justice (ECJ) has ruled in two joined Finnish cases that European member states can limit the carry-over of holiday for workers on sickness absence to the four weeks’ entitlement under the Working Time Directive (WTD).

This decision concerns two separate claims brought under Finnish law. They both related to claimants who had taken a period of sickness absence and wanted to carry forward holiday entitlement exceeding the WTD entitlement which was due to them. The Finnish Labour Court referred the cases to the ECJ to determine whether the carry-over of holiday due to sickness absence applied only to the minimum four weeks’ holiday entitlement provided by the WTD, or whether it also applied to additional leave provided under domestic law or collective agreements.

The ECJ has now confirmed that where Member States provide additional holiday in addition to the four weeks’ minimum entitlement under EU law, this is governed by national law rather than the WTD. The WTD does not preclude rules in domestic legislation or collective agreements preventing the carry-over of any additional holiday entitlement. Member States are therefore free to decide the conditions relating to carry-over of enhanced leave in the event of sickness absence.

This decision provides welcome confirmation of the Employment Appeal Tribunal’s (EAT) decision in Sood Enterprises Limited v Healy where the EAT held that the WTD did not require carry-over of the 1.6 weeks’ additional leave granted under the Working Time Regulations 1998 if a worker was unable to take this leave as a result of sickness absence. Many employers will already follow this approach by limiting carry-over of the additional 1.6 weeks’ leave in cases of sickness absence, unless a relevant agreement provides otherwise. This may be a good time to review any contractual arrangements which allow non-WTD holiday to be carried over in these circumstances.