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The ECJ rules workers continue to build up paid statutory annual leave while on sick leave

In the long-awaited case of Stringer, handed down on 20 January, 2009, the European Court of Justice (ECJ) has clarified the operation of the EC Working Time Directive (EWTD) in relation to whether workers are entitled to annual leave while they are on sick leave.

The ECJ held that the EWTD requires that workers continue to accrue paid statutory annual leave while they are on sick leave, and cannot be denied the opportunity to take that annual leave (whether by taking it once they return to work, or by being paid in lieu if their employment ends while they are off sick).

For the UK, the ECJ decision creates some challenges, and it will be necessary to await a further decision from the House of Lords (hopefully at some point this year) and possibly some amending legislation before the issues are finally resolved and some clarity is given for both employers and employees.

What was the issue?

Employers commonly grapple with two issues when dealing with employees on long term sick leave: does an employee on sick leave continue to accrue annual leave entitlement; and does the employee have the right to use up paid annual leave when sick pay runs out?

The most recent line of authority in the UK in relation to the UK Working Time Regulations 1998 (WTR) was the Court of Appeal’s decision in the Stringer case (that formed the basis for the ECJ decision). The Court of Appeal held that the WTR have the following effect:

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