“Should a worker who falls ill during a holiday be entitled to a replacement break?” Ask that question of most employers and they’d consider it rhetorical. “Of course not”, they’d say. In fact, most workers would agree, taking the view that this is simply bad luck. Follow that with the suggestion workers should be able to carry those “replacement holidays” into the next year and one might expect thigh slapping hilarity.

The humour in these propositions was lost recently on the European Court of Justice (“ECJ”), which has decided exactly that, in a judgment was has been met with revulsion and incredulity from employers’ groups and legal commentators. In the last week, the Chartered Institute of Personnel & Development (“CIPD”), Confederation of British Industry (“CBI”) & Federation of Small Businesses (“FSB”) have all openly criticised the move – which comes during very difficult times of unprecedented economic turmoil.

Mr Pereda worked for a Spanish employer, removing wrongly parked cars from public highways. He had four weeks of annual leave scheduled but suffered an accident at work shortly before this was due to begin. He asked his employers to reallocate him an alternative period of holiday. His employer refused. Mr Pereda challenged this and the matter was ultimately referred by the Spanish Courts to the ECJ. That Court was asked whether, where illness occurs before the period of holiday begins, an worker ought to be allowed to reallocate this regardless of the “leave year” concerned (i.e. carry these holidays over to the next year).

The ECJ has now confirmed workers can seek “replacement holidays” where they have fallen ill during a period of annual leave and, furthermore, that they can carry these holidays over into the following “leave year”. The decision has been much maligned by critics as going further than answering the question the Court was asked to address – which dealt only with the situation of workers falling ill before their holidays started. Employers are now left with the virtually impossible task of policing claims by workers maintaining they’ve fallen ill whilst on a break. Surprisingly, this would seem to cover any illness contracted whilst abroad on a break. The crux of the decision rests in the view of the ECJ that “holidays” should properly be considered periods of rest and relaxation whereas “sick leave” should allow workers to recover from illness.

The case compounds recent miseries for employers, following hot on the heels to the ECJ’s “Stringer” judgment in January. In that case, the Court decided workers continue to accrue holiday entitlement whilst on sick leave (even where absent for the full working year). That judgment was loathed by employers and criticised as the imposition of a draconian interpretation of European law. Similarly, the Pereda case has been met with an onslaught of objections from business’ representatives. The CIPD slated the decision as “divorced from reality”. The FSB has called it “a potential nightmare for employers” and the CBI has pointed to the fact that it is “open to abuse”. Generally, the fear is that this forms the basis for a “slacker’s charter”. What is certain is that this will prove fertile ground for employment dispute in future as workers seek to assert their newly clarified rights and employers query this. The consequences of this ruling will be, for many employers, simply impossible to police.

Whilst the impact of the case remains to be assessed, the only option open to employers will be to consider seriously tightening their sickness absence policies – something that will, in the final analysis, effectively disadvantage workers.

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