The European court of justice (ECJ) have ruled that staff on long-term sick leave are entitled to accrue holiday while off work.

The ECJ judges ruled that those who are unable to work through sickness are still eligible to four weeks of holiday a year, and should receive holiday pay if they leave employment before claiming this.

The ruling is a blow to many small businesses that are struggling to survive and are already having to implement a new government flexible working scheme.

Although if an employee is out of work for a full year then this new right does not apply, and they are not entitled to claim the holiday days or pay.

"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," said David Frost of the British Chamber of Commerce.