A ruling by the European Court of Justice (ECJ) that forces employers in the European Union to compensate employees for sick days they had during paid annual leave period is likely to be problematic for the European economy.

This is according to South African economist Mike Schussler of Economists.co.za, who said on Friday that euro-zone businesses would be set back as a result of the ruling.

"Such a ruling will increase the price of doing business in Europe at a time when it would be least convenient to do so," Mr Schussler said.

The EU Working Time Directive, which takes immediate effect, stipulates that workers who fall sick during the course of their annual leave can claim back the days spent sick.

Anthony Fincham, head of employment at international law firm Cameron McKenna, said: "This ruling plays into the hands of the detractors of the European Court and is a nightmare for employers."

Mr Fincham added that the regulation would be unmanageable and impractical for employers.

"The EU requires that workers have at least four weeks' paid annual leave, which is straightforward enough, but what happens if someone is taken ill while on holiday?" he said.

It is "fine in principle, perhaps, that that should not count as part of the annual leave allowance, but of course this is so open to exploitation and practically unpoliceable by any employer," he added. "It is the employer that will end up with the headache."

According to an excerpt from the directive, "the improvement of workers' safety, hygiene and health at work is an objective which should not be subordinated to purely economic considerations".

A dispute between a Spanish trade union and a group of retail stores is said to have set the precedent for the ruling.

The new directive applies even when paid leave falls on a worker's scheduled sick leave.

The ECJ also ruled that workers who were sick for a long period could accumulate at least one year of unused annual leave.

magubanek@bdfm.co.za