It was ruled in 2009 in the cases of Stringer v HMRC and Pereda v Madrid Movilidad SA, that employees on long term sickness still accrued their holiday entitlement whilst on leave and could carry the entitlement over to the next holiday year, should the employee have been too ill to take it.
This decision has now been extended in the recent European Court of Justice Case of KHS AG V Winfried Schlte. The issue here was not if the employee was entitled to the holiday payment but for how long into the next holiday year can the unused entitlement be carried over? Further KHS AG wanted to establish if national law could impose a limitation on this timescale.
In German law, (as was relevant to this case) employees are currently allowed to carry over the entitlement for 15 months from the date the previous holiday year ends. The court ruled that this was in line with the directive and could be implemented.
This case will not yet apply to UK law but gives interesting scope into the current Working Time Directive which prohibits the carrying over of such entitlement at present. We sense that this will shortly be changed and thus implemented into UK law, we will keep you updated on any developments here.
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