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People on long-term sick leave are entitled to accrue holiday while off work, following a new ruling from the European court of justice (ECJ).

Judges have ruled that people who are unable to work should still be eligible to four weeks of holiday per year and should get the pay equivalent if they leave the job before claiming this time.

The ECJ statement says: '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.'

If an employee is out of work for a full year they are not entitled to claim the holiday days or pay.

The British Chambers of Commerce says the ruling 'lacks logic' and hits businesses at the wrong time.

David Frost, director general of the organisation, says: 'Companies will either be left with the burdensome task of reallocating resource while the accrued holiday is being taken, or they will face a large one-off expense which will undoubtedly damage their cashflow.'

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