A common question posed to our 24 Hour Advice Service concerns whether or not an employee in Ireland who works in the private sector is entitled to accrue annual leave during any period of sick leave. Traditionally in Ireland, by virtue of the Organisation of Working Time Act 1997, employees in Ireland don’t accrue annual leave in such circumstances. However, key decisions in the Court of Justice of the European Union (CJEU) have meant that the Irish approach is out of sync with European requirements. In that respect, it should come as no surprise for employers to learn that Minister Ged Nash is seeking to bring Ireland into line with these European requirements. What is the current Irish position? The Organisation of Working Time Act, 1997, governs annual leave rights and accrual in Ireland. The Act provides that an employee will only accrue annual leave based on their working time and hours worked. In this respect, sick leave is not deemed to be “working time” and as such, in Ireland, employees do not accrue annual leave whilst out sick. As such, in Ireland, employees will only accrue annual leave in the following scenarios:
- time actually worked by an employee, including overtime;
- hours notionally worked during maternity leave, additional maternity leave and extended maternity leave;
- remaining maternity leave to which a father is entitled on the death of a mother;
- adoptive leave and additional adoptive leave;
- health and safety leave;
- parental leave;
- force majeure leave;
- jury service leave;
- initial 13 weeks of carer’s leave;
- public holiday leave and time worked on public holidays;
- annual leave itself (calculated on the basis of hours which would have been worked, had the employee not been on holiday on the days concerned).
Why are we out of sync with European Requirements? It is important to remember that the Organisation of Working Time Act only exists because Ireland, being an EU Member, was required to introduce such an Act in line with the European Working Time Directive 93/104/EC. As such, Irish rules on working time and annual leave needs to fall in line with the European Directive and decisions of the European Courts. This is where the difficulty arises. In a number of important cases, such as Stringer, Schultz-Hoff, Pereda, and Dominquez, the CJEU has determined as follows
- Employees are entitled to accrue their statutory annual leave entitlement even while on sick leave;
- If an employee is unable to take annual leave during the current leave year, they are entitled to carry it forward to the next leave year.
- Employees on long term sick leave, spanning multiple leave years, will not be permitted to accrue annual leave indefinitely. Instead, the annual leave accrued in any given leave year should expire after a reasonable period of time.
As Ireland are out of sync with the above European requirements, it is inevitable that legislation will have to change so that we are compliant. Does this impact my employees now? As it stands, the European decisions do not impact employees and employers who work in the private sector. Such employees are still governed by the Organisation of Working Time Act, 1997, which still to date does not allow employees to accrue annual leave whilst out sick. However, employees in the public sector do accrue annual leave whilst out sick as a complex legal principle called the “direct effect” means that employee who works for the State is automatically covered by the European decisions. What happens next? As highlighted above, Minister Gerald Nash is seeking to update the Working Time Act to account for these European decisions. In that respect, he has opened up discussions on including these amendments in the forthcoming Workplace Relations Bill. If introduced, this amendment will bring Ireland into line with the CJEU decisions on this topic and will have the following result:
- Employees will accrue annual leave whilst on sick leave.
- Employees on long term sick leave, spanning multiple leave years, will not be permitted to accrue annual leave indefinitely. Instead, the annual leave accrued in any given leave year will expire 15 months after that relevant leave year has ended. This effectively means that a sick employee has 27 months to take the annual leave accrued in the original 12 month leave year.
All employers are encouraged to keep up to date on developments in this respect and if you have any questions, please contact our 24 Hour Advice Service on 01 855 5050 where one of our experienced advisors will be more than happy to assist.
