He said: “The change to the legislation will bring clarity in Irish law as to how annual leave can be accrued and carried over when an employee cannot take their paid annual leave due to illness.

“We are striking the right balance between protecting the rights of vulnerable workers who are ill and trying to minimise the cost to business and the Exchequer, as well as implementing the requirements of the EU Directive on Working Time."

“I believe that the changes are fair and supportive to workers while also giving clarity to employers about their obligations to their employees,” Mr Nash concluded.

The amendment to the legislation was made by way of section 86(1) of the Workplace Relations Act 2015.  It will have the following effects:

• Statutory annual leave entitlement accrues during a period of certified sick leave.  
• An annual leave carryover period of 15 months after a leave year will apply to those employees who could not, due to illness, take annual leave during the relevant leave year or during the normal carryover period of 6 months.
• On termination of employment, payment in lieu of untaken accrued annual leave will apply to leave which was untaken as a result of illness in circumstances where the employee leaves the employment within a period of 15 months following the end of the leave year during which the statutory leave entitlement accrued. 

This brings the Organisation of Working Time Act into line with recent rulings of the Court of Justice of the EU.  

Section 86(1) of the Workplace Relations Act 2015 will commence on 1 August 2015.  Section 86(1) of the 2015 Act has made amendments to the Organisation of Working Time Act 1997 to provide for implementation of Court of Justice of the European Union (CJEU) rulings on accrual of annual leave entitlement during sick leave.  These CJEU rulings relate to the requirements of the EU Directive on Working Time (consolidated Directive 2003/88/EC).

Background
In a series of rulings relating to the interpretation of the annual leave provisions of the Working Time Directive, the Court of Justice of the European Union (CJEU), starting with the Schultz-Hoff/Stringer cases (2009), has ruled that employees can accrue annual leave while out on sick leave. In the KHS case (2011), the CJEU ruled that national law could put a cap on the unlimited accrual of annual leave during successive years of absence on sick leave, with the Court accepting on the facts of that case that a 15 month carry over period was not contrary to the Working Time Directive.

The Organisation of Working Time Act 1997, which transposed the 1993 EU Working Time Directive (Council Directive 93/104/EC) into Irish law, provides for a statutory minimum entitlement of four weeks' paid annual leave. It provides that annual leave is calculated on the basis of time worked and is silent on the issue of how time spent on sick leave should be regarded for the purposes of calculating annual leave.

Following a complaint made to the EU Commission in December 2013, the Commission opened an investigation into Ireland's conformity with EU law, as set down in the Schultz-Hoff/Stringer line of cases, in relation to an entitlement to the accrual of annual leave while on sick leave. In July 2014 the Commission issued a Letter of Formal Notice to Ireland indicating that the Commission considers that the relevant provisions of the Organisation of Working Time Act are incompatible with Article 7 of the Working Time Directive (entitlement to annual leave while on sick leave) as set down in the relevant CJEU case law.

A link to the Workplace Relations Act 2015 is below for reference.
http://www.irishstatutebook.ie/pdf/2015/en.act.2015.0016.pdf

Workplace Relations Act 2015 (Commencement) Order 2015 Section 86(1) of the Workplace Relations Act 2015, together with a number of technical and operational provisions of the Act, will be brought into operation on 1st August, 2015 by the Workplace Relations Act 2015 (Commencement) Order 2015, made byMinister Richard Bruton, TD, Minister for Jobs, Enterprise and Innovation, this week.

The Workplace Relations Act 2015 will give effect to new workplace relations structures, including the establishment of the Workplace Relations Commission which it is proposed to commence on 1st October.  There are a number of technical and operational provisions of the Act which can be commenced in advance of the establishment of the new structures, and these will be included in the Workplace Relations Act 2015 (Commencement) Order 2015.