European judges have reversed a ruling by the Court of Appeal and stated that workers on long-term sick leave are entitled to full paid holiday rights.
The decision came after the House of Lords and a German court both sought EU clarification in similar cases in which workers found that their annual holiday rights were affected by sick leave.
The European Court of Justice ruling declared: "A worker does not lose his right to paid annual leave which he has been unable to exercise because of sickness. He must be compensated for his annual leave not taken."
It contradicts a decision by the Court of Appeal four years ago which decreed that workers absent on long-term sickness could not claim holiday or holiday pay for years when they were not at work. Neither could they expect compensation for lost holiday if they left the job after prolonged sick leave.
The judges ruled that the right to paid annual leave cannot be conditional on a worker's capacity to work and still accrues during absence on sick leave.
"The entitlement to annual leave of a worker on sick leave duly granted cannot be made subject to the obligation actually to have worked in the course of the leave year laid down by a member state," said the ruling.