Legislative Update: Private Sector employees to accrue annual leave whilst on sick leave

Currently within Irish employment law, employees working in the private sector are not entitled to accrue annual leave whilst on sick leave. However under new laws about to take effect, private sector employees on long-term sick leave will be entitled to accrue annual leave.

Currently, the Working Time Act 1997 provides that the accrual of annual leave is based on hours worked, and as such, an employee does not accrue annual leave while on sick leave. In Ireland it has been the case that an employee on sick leave will not accrue annual leave whilst on a leave of absence due to illness.

However as a result of decisions taken in the Court of Justice of the European Union (CJEU) the rule relating to holiday accrual which is contained within the Workplace Relations Bill, means that employees will now be entitled to accrue holiday leave whilst off sick, although they will have to use the holiday days within 15 months of accruing them. An overview of the new law which is contained in the Workplace Relations Bill 2014 is outlined below:

  • Where an employee is absent from work then that absence will count as working time where it is covered by a medical certificate from a registered medical practitioner
  • Where an employee is unable to take all or part of their annual leave during a leave year due to a medically certified illness then the employee will still be permitted to take that annual leave up for 15 months after the leave year has ended
  • If an employee’s employment is terminated during the 15 month period mentioned above the employee will be entitled to payment in lieu of any such outstanding leave.

This change will clearly have significant cost implications for employers and it is recommended that all employers review their absence policy to ensure that they are consistent with the amendment.




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