KHS AG v Schulte ECJ, 22.11.11 (C-214/10)
The ECJ has held that placing a limit of 15 months on the period
during which an employee can accrue and carry over annual leave was
compatible with the EU Working Time Directive ("WTD"),
even where the effect was to deprive an employee of the opportunity
to take such leave due to long term sickness absence.
The ECJ's view was that the principle established in
Stringer/Schultz-Hoff, that annual leave should not be
lost when an employee is on long term sick leave, must be qualified
so as to avoid workers accumulating paid annual leave for an
unlimited period while on sick leave.
It is worthy of note that, unlike in
Stringer/Schultz-Hoff, the carry-over period of 15 months
in this case was longer than the leave year it related to. The ECJ
held that the carry-over period of 15 months was sufficient to
ensure that annual leave retained its positive effect as a rest
period.
Implications
This decision confirms that the WTD does not preclude national
provisions, such as collective agreements, that limit the
accumulation of paid annual leave during long-term sickness absence
by a carry-over period of 15 months or more.
This suggests that UK employers would be entitled to introduce a
carry-over restriction without being in breach of the WTD. The time
limit imposed needs to be considered and must not impact on the
right to take leave during the relevant reference period. However,
there is some divergence between European and UK case law in this
area, and it remains to be seen how the UK courts will interpret
the domestic Working Time Regulations 1998 (which derive from the
WTD) in light of this decision when faced with a similar set of
facts.
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