Employees will have a legal right to claim back annual leave if they become ill whilst on holiday, the European Court of Justice (ECJ) has decided.
Under the regulation changes to the working time directive - expected to come into effect in October - workers will be entitled to time off in addition to the standard four weeks annual leave, as long as a sick note is provided. The ECJ ruling will also apply to those who fall ill while on maternity or paternity leave.
The move, which in some cases could see employee holiday carried over into the next year, is estimated to cost UK businesses more than £100 million a year, according to The Daily Telegraph.
Businesses and employment lawyers have voiced concern that the changes are likely to be abused by false claims, proving costly for businesses.
Michael Slade, managing director of Bibby Consulting and Support, said that many companies would be 'frustrated' and 'disappointed' with the ruling given the Government's continuing pledge to reduce red tape for firms.
"It remains to be seen how much impact these changes will have on the number of employees claiming sickness during their holidays," he said. "SMEs will see this change as yet another burden that they can well do without, and one which appears to fly in the face of the Government's pledge to help business leaders."
Talking to The Daily Telegraph, Guy Bailey, head of employment and employee relations at The Confederation of British Industry (CBI) said: "While active discussions are ongoing in Brussels on the future of the working time directive, it may make sense for the UK Government to pause before implementing the latest European Court of Justice rulings. Introducing a set of changes in October that immediately have to be reviewed and replaced would not be a good outcome."