Since 2009, there has been much uncertainty regarding the accrual of annual leave entitlement during periods of sick leave.
Before 2009, the legal position in Ireland under the Organisation of Working Time Act 1997 (the "Act") was that employees do not accrue annual leave during periods of sick leave. In January 2009, the Court of Justice of the European Union ("CJEU") held in the joint reference of Stringer v Revenue and Customs Commissioners and Schultz-Hoff v Deutsche Rentenversicherung Bund ("Stringer") that an employee who was on sick leave and was therefore unable to take paid annual leave was entitled to take it at a later time, after the period of sick leave had ended. Former employees in the same position were entitled to compensation in lieu of any accrued but untaken annual leave.
The Case Law
Since this decision in Stringer, a number of subsequent referrals to the CJEU have reaffirmed that position.
In the more recent case of Dominguez v Centre Informatique du Centre Ouest Atlantique, Prefet de la region the CJEU has confirmed that the entitlement to annual leave or payment in respect of annual leave cannot be affected while the employee remains on sick leave.
In KHS AG v Winfried Schulte, the CJEU held that where an employee is unfit to work for several reference periods (i.e. several leave years), European Union law does not preclude national provisions or practices, such as collective agreements, which limit the accumulation of leave, by a carry-over period, in this case 15 months, on the expiry of which the right to paid annual leave lapses. From an employer's perspective, these cases are a helpful guidance that the entitlement is not one which is capable of accruing ad finitum.
Article 7(1) of the Working Time Directive 2003/88 (the "Directive") provides that:
"Member States shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice"
Section 19 of the Act is the implementing provision of Article 7(1). Section 19 (1) reads:
"Subject to the First Schedule ...an employee shall be entitled to paid annual leave (in this Act referred to as "annual leave") equal to—
(a) 4 working weeks in a leave year in which he or she works at least 1,365 hours (unless it is a leave year in which he or she changes employment),
(b) one-third of a...