Sick of Annual Leave?

Accrual of annual leave during sick leave

A significant difference in the Irish position regarding an employee’s right to accrue annual leave, when absent due to illness and that of the Court of Justice of the European Union (CJEU) has been highlighted over the past number of years.  This has led to much confusion and criticism by employee representatives, given that the Irish position is that employees do not accrue annual leave during periods of sick leave. However, recent decisions from the CJEU state otherwise, and these decisions are enforceable against public sector employers, in circumstances where Ireland has failed to correctly implement the EU Working Time Directive 2003/88.

The position in the CJEU

In recent decisions the CJEU has ruled in favour of employees claiming that annual leave can be accrued during a period of sick leave. In the landmark decision of HM Revenue and Customs v Stringer and Schultz-Hoff v Deutsche Rentenversicherung Bund (2009) The CJEU held that workers on sick leave continued to accrue annual leave, and were entitled to take that annual leave, after the sick leave had ended. The Court clarified at a later date, that Member States may legislate on whether employees can take annual leave during sick leave, or instead take annual leave into the next year, if they are prevented from taking annual leave during the year, due to having been on sick leave.

Furthermore, in KHS AG v Winifried Schulte (2012) the CJEU imposed a limitation on this ruling and stated that the right to continue to accrue annual leave cannot be unlimited.

The position in Ireland

Section 19 of the Organisation of Work Time Act 1997 (‘the 1997 Act’) provides that employees are entitled to annual leave on the basis of time worked.  Therefore employees who are on sick leave (and therefore not working) do not accrue annual leave. However, through the doctrine of Direct Effect State bodies and State agencies in Ireland are expected to give effect to the European position, resulting in an area of uncertainty and conflicting decisions in Ireland and Europe.

For instance, in Roskell Limited and Armands Rikmanis (September 2012), the Rights Commissioner determined that an employee was entitled to compensation for breach of his rights under the 1997 Act arising from the employer’s failure to pay him for annual leave while he was on sick leave. The employee’s claim was a claim for payment in lieu of holidays. The employer’s appeal was then upheld and the Rights Commissioner decision set aside. Entitlement to pay for annual leave not taken due to illness does not arise automatically, particularly where the employment continues. It was specifically noted by the Court that this case concerned a private employer therefore the doctrine of Direct Effect could not apply so as to bind a private employer.

The future

In November 2014 the Minister for Jobs Enterprise and Innovation announced his intention to introduce legislation which will amend the Organisation of Working Time Act 1997, which has been given effect in the Workplace Relations Bill 2014. This amendment will bring the Irish position in line with that of the CJEU and allow workers to accrue annual leave during periods of sick leave, within a 15 month period from the end of that leave year.

Contact SIobhra Rush for more information.


This publication is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Ogier Leman for any action taken or not taken in reliance on the information set out in this publication. Professional or legal advice should be obtained before taking or refraining from any action as a result of the contents of this publication. Any and all information is subject to change.

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