Groundbreaking judgement in holiday pay case

The European Court of Justice has handed down its opinion in the case of Stringer v HMRC (previously known as Ainsworth v HMRC).

The ECJ has held that a worker who is on sick-leave for the whole of an annual leave year is entitled to a period of four weeks' paid annual leave, despite the fact they are not actually at work. The national courts can decide whether the paid leave can be taken during that year, or whether it should be carried over to another year, but either way the employee is entitled to be paid at some point.

The Court also ruled that the right to paid annual leave is not extinguished at the end of a leave year if the worker was on sick leave for the whole of that year, or if he was absent on sick leave for part of the year and was still on sick-leave when his employment terminates

This is not going to be a popular decision with employers.

The House of Lords will now give a final judgment, and (in the light of the ECJ opinion) will no doubt overturn the Court of Appeal's decision from April 2005 that the right to paid holiday leave did not accrue during periods of sickness absence.