Labour Court issues determination on accrual of annual leave during sick leave in private sector

In a significant decision issued earlier this month, the Labour Court determined that an employee was not entitled to rely on provisions of the Working Time Directive against a private sector employer in circumstances where the Organisation of Working Time Act could not be interpreted consistently with the Directive.   

The claimant in Highfield Healthcare v Agnieszka Jemiola claimed that she was not afforded an accrual of annual leave in respect of a period during which she was absent from work on certified sick leave. She relied on the decisions of the European Court of Justice (as it then was) in Stringer/Shultz-Hoff, where the Court found, by reference to the relevant provisions of the Working Time Directive, that an employee is entitled to accrue annual leave during periods of absence from work due to illness. Section 19(1) of the Organisation of Working Time Act however, provides that while employees are entitled to a minimum of four weeks paid annual leave, the entitlement to paid annual leave is based on hours worked in the leave year. The Act does not provide for an entitlement to accrue annual leave during periods of sick leave. 

In Highfield Healthcare, the Labour Court stated that the Working Time Directive cannot have direct effect in a case involving private parties. The Labour Court noted that there are circumstances in which reliance can be placed on a Directive in a dispute to which the doctrine of direct effect is inapplicable by application of the doctrine of ‘conforming or consistent interpretation’.  However, this doctrine is not without its limitations, and cannot be used where to do so would contradict national law. The Court decided to apply domestic law 'as it finds it', and held that Highfield Healthcare had not contravened section 19(1) of the Act.

It is important to note that the complainant (who was professionally represented) did not make any submissions in relation to this point of interpretation, so it is possible that the Court may take a different view in another case if the point is fully argued. This decision may provide some comfort to private sector employers who have chosen not to apply Stringer/Shultz-Hoff on the grounds that it does not have direct effect. 

This comfort is likely to be short-lived however, in circumstances where the Minister has already announced his intention to introduce legislation which will clarify the rules on accrual of annual leave while on sick leave (to view our bulletin on this announcement, click here). That said, the decision may have application in other areas of employment law where there are contradictions between Irish and European law, such as the law on mandatory retirement ages.

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