When can holiday pay be rolled over?

The European Court of Justice (ECJ) recently heard two combined Finnish cases concerning
employees who hadn’t been able to take full annual leave due to sickness absence.

Under the Working Time Directive (WTD) all employees are entitled to minimum four weeks annual leave. Many countries (including the UK which has an extra 1.6 weeks’ leave) offer an ‘extra’ amount of annual leave above the four week minimum.

Key to these cases was whether untaken annual leave in excess of the four week minimum could be rolled over; the ECJ ruling that this was a matter for domestic law.

One of the employees in these cases was entitled to 5 weeks annual leave per year and the other was entitled to 7 weeks. Finnish law stipulates that untaken annual leave in excess of the 4 weeks minimum offered by the WTD cannot be rolled over, even in the event of sickness. The CJEU had to decide whether this national law was permissible.

The ECJ confirmed that this was permissible and that whether employees can roll over holiday in excess of the 4 weeks’ minimum was a matter for domestic law.

The ECJ ruling therefore confirms the decision made in the UK case Sood Enterprises Ltd v Healey that the initial four weeks of annual leave can be carried over to the next year if the reason the leave
cannot be taken is due to sickness. However, there is no obligation for the employer to roll over any more than that.