Asociacion Nacional de Grandes Empresas de Distribucion (ANGED) v Federacion de Asociaciones Sindicaled (FASGA) C-78/11

Must an employee who falls sick part-way through a period of pre-booked annual leave be allowed to take their "lost" holiday entitlement at a later date?

Up to now, employers have largely viewed the answer to this question as a matter for their own discretion (save perhaps in cases of long term sickness absence). However, the decision of the Court of Justice of the European Union (CJEU) in ANGED v FASGA suggests that employers will now have to provide this right. We consider below the potential impact of the decision and the practical issues that may arise for employers.

Decision

The CJEU held that the European Working Time Directive (2003/88 EC) precludes national laws which deprive a worker of the right to take paid leave at a later date in circumstances where they became unfit for work part way through a period of pre-booked annual leave.

In reaching its conclusion, the CJEU referred to the previous European decision of Vicente Pereda. In that case it was held that a worker who is already on sick leave when a period of pre-booked annual leave is due to commence is entitled to request, and take that leave at a later date when they are fit to work.

The CJEU now goes further than that, and says that there will be an entitlement to take the holiday at a later date, regardless of when the incapacity arose.

The Court stated that the point at which any temporary incapacity starts was irrelevant to the question of whether a worker's pre-arranged annual leave should be deferred to a later date. It concluded that it would be contrary to the purpose of annual leave entitlement to limit the right to the situation in the Pereda case, namely where the worker was already unfit for work when the paid annual leave was due to commence.

Implications

UK courts and Tribunals are obliged to interpret UK legislation in a way that is compatible with EU law. As a result, this decision has the potential to spark a new chain of cases in which employees argue that they were entitled to claim 'additional' holiday as they became ill during a period of annual leave.  The practical issues around monitoring and reporting of short term sickness absence will increase. 

While some employers already allow for such 'self certification' during holidays, the potential for abuse is clearly substantial. Cautious employers may decide to update their practices to formally recognise an employee's right to take paid holiday at a later date. However, it will be necessary to maintain an extremely robust and organised approach to monitoring and reporting of sickness absence if widespread abuse of the system is to be avoided.

It remains to be seen how the courts will interpret the meaning of "unfit" to work as the threshold for establishing the right. Although the court's interpretation will be decisive in respect of Working Time Regulations holiday entitlement, employers might consider introducing their own concept of "unfit to work", as a means of limiting the impact and managing employees' expectations.

Those employers who provide annual leave entitlements in excess of that provided for under the Working Time Regulations might simply seek to specify that once booked or at least commenced, such additional holiday will be deemed to have been taken, irrespective of whether or not illness then occurs.

Furthermore, employers will also want to consider whether to limit any enhanced sick pay entitlement, over and above the SSP scheme, when such sickness is reported to have occurred during the course of pre-booked annual leave.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.