The EU Working Time Directive lays down minimum health and safety requirements for the organisation of working time. The purpose of the entitlement to paid annual leave is to enable a worker to rest and to enjoy a period of relaxation and leisure. The purpose of the entitlement to sick leave, however, is to enable a worker to recover from illness.

In Pereda v Madrid Movilidad SA, the European Court of Justice has ruled that a Spanish worker who suffered an accident at work, with the result that he was on sick leave for most of the annual leave period allocated to him, had the right, on request, to reschedule his holiday, even if this meant carrying it forward to the following leave year.

This follows the earlier case of Stringer and others v HM Revenue and Customs, which established that the right to take annual leave is not extinguished if an employee is on long-term sick leave. It is up to the national courts to decide whether paid leave can be taken during a period of sickness or whether it should be carried over to another year.

Both decisions have raised questions regarding the operation of the Working Time Regulations 1998 (WTR), which implement the EU Directive into UK law. Under the WTR, if a worker becomes ill just before taking annual leave or during the holiday itself, he or she does not have any automatic right to convert that holiday to sick leave. Also, workers must take a minimum of four weeks’ holiday in each leave year. It will therefore require further case law or a change in the legislation to clarify the situation. The Department for Business, Innovation and Skills has said that it is examining the terms of the judgment and will issue further guidance in due course.