In the UK, workers are entitled to at least 5.6 weeks of annual leave. Four weeks of this derives from the EU Working Time Directive (‘WTD Leave’), but an additional 1.6 weeks of holiday is given in the UK under the Working Time Regulations 1998 (‘WTR Leave’).

It is well-established that workers who cannot use their holiday entitlement due to sickness absence, must be permitted to take it when they return to work. In cases of long-term sickness absence, this right includes carrying the unused holiday into the next leave year. This carry-over principle applies irrespective of whether the worker has requested that their holiday be carried over.

This raises the question of whether workers should be allowed to carry over only their WTD Leave or their entire 5.6 weeks of annual leave when they are prevented from taking any holiday due to a long-term sickness absence.

The Employment Appeal Tribunal (EAT), in Sood Enterprises Ltd v Healy, previously decided the issue, ruling that WTR Leave does not carry over for workers in circumstances of long-term sickness absence, only WTD Leave can be carried over.

The European Court of Justice, in TSN v Hyvinvointialan, has now confirmed that the EAT’s approach was correct. Its opinion was that any right to paid annual leave that exceeds the minimum level under EU law is governed exclusively by national law. Therefore, unless there is a contractual agreement enabling a worker to carry over their entire annual leave entitlement if unused due to sickness, this will be limited to their four weeks of WTD Leave.

Although this case only concerned long-term sick leave, it is also worth noting that there have been other cases establishing the same right to carry over holidays in situations involving maternity leave or where workers have been wrongly told that annual leave would be unpaid (e.g. where the employer mistakenly believes that the worker is an independent contractor and has no right to paid holiday).

If you have any questions about holidays, please do not hesitate to contact our expert employment team on 0161 941 4000 or by email.