Workers who fall sick during their annual leave are entitled to take corresponding paid leave at a later date, the European Union’s top court has ruled.

The European Court of Justice ruling is legally binding throughout the EU.

Thursday’s ruling was prompted by a Spanish trade union case against a group of department stores.

“The right to paid annual leave cannot be interpreted restrictively,” the court says. The UK does not have an opt-out in this area of EU labour law.

The court in Luxembourg said the EU Working Time Directive grants workers a right to at least four weeks’ paid annual leave “even where such leave coincides with periods of sick leave”.

The ECJ says “the point at which the temporary incapacity arose is irrelevant”.

“Consequently, a worker is entitled to take paid annual leave, which coincides with a period of sick leave, at a later point in time, irrespective of the point at which the incapacity for work arose.”

According to an earlier ECJ ruling, workers who fall sick before a period of annual leave can also reschedule that leave period so that it does not clash with their sick leave.

The UK’s opt-out from the Working Time Directive only applies to the directive’s clause setting a 48-hour limit on the working week.

The UK government says “no-one can opt out of any other part of the directive”.

The UK and at least 14 other countries use the opt-out, which enables workers voluntarily to work more than 48 hours a week.

Carrying leave over

An EU source told the BBC that the ECJ ruling has full, immediate effect EU-wide, regardless of the type or size of employer.

Workers who believe their employer has infringed their right to paid annual leave can seek justice in their national courts.

Infringement cases against employers who violate the directive can also be brought by the European Commission or national governments.

Commenting on Thursday’s ruling the Confederation of British Industry said that “as a result of earlier ECJ judgments, this change has already happened in the UK, bringing along headaches for employers”.

Guy Bailey, CBI Head of Employment and Employee Relations, said that “with the rules currently under discussion again in Brussels, the CBI would like to see the judgments reversed, so that the directive is focused on the health and safety of the workforce, as originally intended”.

The Working Time Directive has been hotly debated in the EU for years. The European Parliament has tried to get the opt-out removed, challenging the UK position.

The UK’s Federation of Small Businesses urged the UK government on Thursday to “avoid implementation of any ECJ ruling on annual leave and sick leave for as long as possible, given the ongoing negotiations by the social partners on the Working Time Directive”.

The business group said changing UK law in this area again “would be unhelpful, confusing and add burdens for small businesses, which at this time they can ill afford”.

In cases where workers fall sick towards the end of the year, and are unable to take all of their annual leave, they can under EU law carry over their unused leave into the next accounting period.

The ECJ has also ruled that the long-term sick have the right to accumulate at least a year of unused annual leave. But the ECJ says the amount is not open-ended and member states can set an upper limit.