Annual Leave Carry Over and Sickness Absence

By Ezra Moffatt

Associate Legal Executive

Are employers required to allow an employee to carry over all their annual leave to the next holiday year if they are unable to take it due to sickness absence? 

According the recent case of TSN v Hyvinvointialan (a Finnish case) the answer is no.

The Working Time Directive states that full-time employees should get a minimum of four weeks annual leave per year. UK law provides a more generous minimum annual leave allowance of 5.6 weeks (28 days including bank holidays).

In two combined cases, the Court of Justice of the European Union (CJEU) held that any holiday in excess of the four weeks provided for in the Working Time Directive does not have to be carried over. In these two cases one was entitled to five weeks and the other seven weeks based on Finnish law and collective agreements and both employees were unable to take their annual leave due to sickness absence.

The CJEU considered whether national rules preventing carry over of more than four weeks leave were permissible.

They stated: “In such a situation, the rights to paid annual leave thus granted beyond the minimum required by [the Working Time Directive] are governed not by that directive, but by national law, outside the regime established by that directive…In the light of the foregoing considerations, the answer is that [the Working Time Directive] must be interpreted as not precluding national rules or collective agreements which provide for the granting of days of paid annual leave which exceed the minimum period of 4 weeks…and yet exclude the carrying over of those days of leave on the grounds of illness.”

This confirms that unless there is a contractual obligation, UK employers do not have to allow employees to carry over more than the four weeks allowed under the Working Time Directive and employees will lose the extra 1.6 weeks.