The Advocate General has recently given her opinion that annual leave untaken by workers on long-term sick leave may expire no earlier than 18 months after the end of the holiday year in which it arises.

The employee in the case of KHS AG V Schulte had been on long term sick leave for over 6 years before his employment terminated in 2008. The employee brought a claim seeking payment in lieu of the annual leave he had accrued during 2006-2008. The employee’s claim originally succeeded but the employer appealed saying that the employee’s holiday rights for 2006 and 2007 had expired and he could no longer claim a payment in lieu.

The Advocate General emphasised that the EU Working Time Directive did not require indefinite accumulation of annual leave. Case law indicates that the health and safety objective of annual leave is to allow the worker time to recuperate and this is most effectively met when the leave is taken during the holiday year in which it arises. Clearly the benefit of such leave decreases over time following the relevant year. In addition, the Advocate General believes that it is in the worker’s interests to be re- integrated into the workforce as quickly as possible after long-term absence, which would be undermined if a long period of annual leave was added onto the worker’s absence. It was also noted that the unlimited accumulation of annual leave entitlement might encourage employers to dismiss absent sick workers sooner than they would have ordinarily have done so.

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The ECJ has decided that workers on sick leave may carry over leave into the next leave year where they are unable to take it in the current year due to sickness. The ECJ also ruled that the Working Time Regs do not prevent a worker from taking annual leave during sick leave.