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The case of Sobczyszyn v Szkoła Podstawowa w Rzeplinie confirmed that yes it does. This was a case which came before the European Court of Justice and, whilst it doesn’t say anything new, it is a useful reminder that Article 7(1) of the Working Time Directive 2003/88/EC provides 4 weeks annual leave for every worker which is a fundamental tenet of EU social law. Only on termination can payment be made in lieu. Annual leave therefore accrues during a period of sick leave.
Also, if scheduled leave coincides with sickness, a worker can designate a different time to take leave.
The purpose of paid leave is rest and relaxation. Sick leave is for recovery from illness, it is not rest; annual leave can be rescheduled on recovery.
In summary, whether leave has been scheduled or booked makes no difference; if sickness prevents annual leave, workers must be able to use annual leave at a later date.
It remains to be seen whether Brexit will see the UK Government legislating in a different way, but this is presently thought to be unlikely.
Andrew Macmillan, Solicitor, Motor Industry Legal Services