In Schultz-Hoff v Deutsche Rentenversicherung Bund; Stringer and others v Her Majesty's Revenue and Customs Cases C-350/06 and C-520/06 ECJ, the ECJ has held that the Working Time Directive allows member states to prevent workers from taking annual leave during periods of sickness, provided that they are permitted to take it at some other time. If sickness prevents a worker from taking his or her annual leave entitlement, it must be carried over into the next leave year. Workers whose employment is terminated cannot have their payment in lieu of annual leave reduced on account of a period of sickness prior to the dismissal.
In Lyddon v Englefield Brickwork Ltd EAT/0301/07, the EAT held that, where an individual knew that his normal pay would include an element of holiday pay, subsequent identification in his payslip of the actual amount so allocated was sufficient to make it part of his contract, thus allowing the employer to offset those payments against the pay that was due to him when he actually took holiday.
In McMenemy v Capita Business Services Ltd [2007] IRLR 400 CS the Court of Session held that an employer that did not award time off in lieu of bank holidays to a part-time employee who did not work on Mondays was not in breach of the part-time worker Regulations.