Although case law has established that workers are entitled to carry forward annual leave from one year to the next as a result of sickness, the Court of Justice of the European Union (CJEU) has held in the conjoined cases of TSN v Hyvinvointialan liitto ry and AKT ry v Satamaoperaattorit ry that annual leave in excess of the four weeks provided by the Working Time Directive does not have to be carried over.
In the first case, Ms Luoma was entitled under Finnish law and a health sector collective agreement negotiated by TSN to 42 days (seven weeks) of paid annual leave. After a period of sick leave, she asked to carry over the six days’ holiday to which she was entitled under the collective agreement but was refused.
In the second case, Mr Keränen was entitled to 30 working days (five weeks) of paid annual leave under Finnish law and a freight transport sector collective agreement negotiated by AKT. After a period of sick leave, he also requested to carry over six days to which he was entitled under the collective agreement into the next holiday year. The employer refused.
The unions complained to the Labour Court which asked the CJEU to decide whether employees entitled to carry over annual leave days in excess of the minimum set down in Article 7 under national law or a collective agreement are prevented from carrying over holidays above the minimum due to sickness.
Under Article 7 of the Working Time Directive (WTD), workers are entitled to a minimum of four weeks’ paid annual leave per year. Under Article 15, member states are entitled to introduce laws or facilitate collective agreements which are more favourable to the safety and health of workers. In the UK, the Working Time Regulations give workers a further 1.6 weeks of leave in addition to the four-week minimum.
Decision of CJEU
The CJEU noted that the WTD does not prevent national laws of member states from providing for more paid annual leave over and above the minimum required under Article 7.
Where that is the case, it is for the member states to determine “the conditions for granting and extinguishing those additional days of leave”. So for instance, member states can decide whether some or all of the annual leave above the four weeks in the WTD can be carried over where a worker is unable to take the additional leave due to illness.
The same applies to collective agreements which give workers a right to a period of paid annual leave over and above the minimum four-week period under Article 7, but which exclude the right to carry over all or some of the days of paid annual leave in excess of the minimum period, where the worker has been incapable of working due to illness.
The CJEU therefore concluded that Article 7 must be interpreted as allowing national rules or collective agreements which provide for additional days of paid annual leave but which do not allow those days of leave to be carried over, following a period of sick leave.
It should be remembered that the Working Time Regulations 1998 provide that a relevant agreement such as a collective agreement may allow for the additional 1.6 weeks to be carried over to the next leave year.