Minister announces legislation clarifying rules on accrual of annual leave while on sick leave

The Minister for Jobs Enterprise and Innovation has announced his intention to introduce legislation which will amend the Organisation of Working Time Act 1997 to allow workers to accrue annual leave during periods of sick leave. However, such annual leave will not accrue indefinitely in respect of workers who are on long-term sick leave. Leave will be subject to a maximum “carry-over” period of up to 15 months from the end of the year in which it accrued.

The Organisation of Working Time Act currently provides that employees are entitled to a minimum of four weeks' paid annual leave, and that entitlement to be paid annual leave is based on hours worked in any given leave year. The Act does not provide for an entitlement to accrue annual leave during periods of sick leave.

In a 2009 decision, Schultz-Hoff/Stringer, the Court of Justice of the European Court of Justice 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. In a subsequent decision, KHS AG v Schulte, the Court of Justice of the European Union held that the Working Time Directive does not preclude a national law whereby a worker on long-term sick leave loses untaken holiday entitlements 15 months after the leave year to which it relates.

It is expected that the forthcoming amendments will be bring the Organisation of Working Time Act in line with these decisions of the Court of Justice of the European Union.

The Minister did not indicate any intention to change the statutory provisions which require an employee to return to work before he or she is entitled to take the annual leave which has accrued in this way.  Neither did he indicate any intention to change the fact that employers have the right to determine when employees take their annual leave, subject to certain protections for employees.

If you have any questions, please contact Elaine Kelly, or Loughlin Deegan from our Employment Law team.