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It was held in Neidel v Stadt Frankfurt am Main (C-377/10) that it is for national courts to determine whether employers must make payments in lieu of more than the minimum four weeks' paid annual leave provided for in the Working Time Directive (‘WTD') and the extent to which annual leave may be carried forward for those employees who are absent on sick leave.
Mr Neidel worked as a fire fighter in Germany between 1970 and 2007. In 2007 he became medically unfit to work and he retired in 2009. He claimed payment in lieu of 86 days' untaken leave between 2007 and 2009. It was held by the ECJ that the right to four weeks' paid annual leave under the WTD could not be derogated from by national law but, importantly, that the WTD did not oblige member states to provide for payment in lieu of any additional leave that was not taken due to illness (which would seem to apply both to the additional 1.6 weeks of additional leave which is granted by the Working Time Regulations 1998 in the UK and to any additional contractual holiday leave).
No definite answer was given on how long holiday could be carried over, but based on European case law to date, a 9 month carry over period is almost certainly too short (Neidel v Stadt Frankfurt am Main) and an 18 month carry over period may be acceptable (KHS AG v Schulte). It remains to be seen how this will play out in the English courts, but the European decisions give a fairly good indication and employers may therefore want to consider whether to include appropriate limitation clauses in their contracts of employment.
