It had been argued that workers are not eligible for holiday rights accrued after prolonged illness, but the new 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".
The ruling is a victory for the UK Revenue and Customs staff who challenged the loss of their annual holiday after a period of absence because of sickness.
The European Court of Justice ruling reverses a Court of Appeal decision 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.
The court said: "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."
It added: "The Court concludes that the right to paid annual leave is not to be extinguished at the end of the leave year and/or of a carry-over period laid down by national law."
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