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Important European decision on annual leave awaited

The European Court of Justice is currently considering whether annual leave entitlement can be terminated or whether it will continue to accrue and be carried forward indefinitely whilst employees are on long term sick leave.

The case in question, KHS AG v Winfried Schulte, involves an employee on long term sickness leave who has accrued several years' of holiday entitlement. The UK Working Time Regulations already need to be amended to take account of recent European judgments stating that paid annual leave does continue to accrue during sick leave, that employees can take annual leave whilst off sick and can carry forward annual leave that they have scheduled if they then go on sick leave and cannot take the annual leave when originally planned. However, as yet there is no guidance on how long the annual leave can continue to accrue for.

Once the case has been decided, employers may need to re-assess their annual leave policies to ensure that they comply with the decision. An employment solicitor will be able to advise on any amendments to policies and procedures that may need to be made.