Case Update: Labour Court Tackle Issue of Accruing Annual Leave whilst on Sick Leave

At present, under the Organisation of Work Act 1997, employees in Ireland who work in the private sector will only accrue annual leave based on hours worked. However, case law in the European Courts has highlighted that employees ought to continue accrue annual leave whilst out on sick leave, thus bringing Irish legislation into conflict with European requirement. This matter recently came up for consideration in the Labour Court case of Highfield Healthcare -v- Agnieszka Jemiola (DWT14110). European Position Since 2009 In the Highfield Healthcare case, it was argued before the Labour Court that the employee should still accrue annual leave having taken into consideration the Court of Justice of European Union decisions in Schultz-Hoff (C-350/06) and Stringer (C-520/06). In these cases, the CJEU held that that the entitlement of employees to four weeks paid holidays per year cannot be made dependant on the number of hours worked in that leave year. Specifically, the CJEU held that an employee on sick leave continues to accrue annual leave which they must be entitled to take on their return to work. Irish Position Since 2009 Interestingly, the Schultz-Hoff and Stringer decisions were issued on 20 January 2009 but have only had an impact in Ireland in the public sector. Essentially, the Irish State is bound by the decisions of the CJEU meaning that anyone working for the State (i.e. the public sector) started to accrue annual leave from 20 January 2009. However, private individuals/undertakings (i.e. the private sectors) are not automatically bound by the decisions of the CJEU meaning that the Schultz-Hoff and Stringer decisions would only apply in private sector workplaces if they were compatible with the Organisation of Working Time Act 1997. As highlighted above, the Working Time act and the CJEU decisions are not compatible. Highfield Heatlhcare Decision The Labour Court noted that the CJEU decisions “cannot have a direct effect in a case involving private parties”. As such, the Labour Court asked the employee’s representative if they had any justifiable legal basis for the argument that the private sector employer in this case should be bound by the CJEU decisions. The representative was unable to present a submission on this point and as a result the Labour Court held that the employee was not entitled to accrue annual leave over the duration of her sickness absence. Future Developments Whilst this decision is positive for private sector employers, it may be short lived. Minister Ged Nash has outlined proposals to amend the Organisation of Working Time Act in the upcoming Workplace Relations Bill. If these amendments take place (most likely this year) then they will incorporate the above CJEU decisions into Irish law meaning that workers in the private sector will accrue annual leave while on sick leave, subject to the limitation that such annual leave must be taken within 15 months of the end of the leave year. Employers are encouraged to take stock of these proposed developments so as to ensure that they remain compliant with Irish employment law. Given the likelihood that private sector employees will begin to accrue annual leave whilst on sick leave, employers are encouraged to carry out a workplace audit of the last number of leave years to identify what the likely additional cost to the business will be going forward. As always, employers are encouraged to contact the 24 Hour Peninsula Advice Service on 01 855 5050 if they have any questions on the content of this article.