Businesses struggling to retain jobs amid a deepening economic crisis were dealt a new blow by a European court ruling on Tuesday that will allow employees to accrue paid holidays even during long-term sick leave. Experts said the decision was likely to prove extremely costly for employers, which are already facing expanded obligations in areas such as maternity rights and paid-leave entitlements.

Under the ruling, which was handed down by the European Court of Justice and applies across the European Union, workers who have been off sick for 10 years would have racked up more than 40 weeks’ “banked’’ holiday at full pay if, and when, they return to the workplace. Industry groups such as the CBI employers’ organisation were quick to attack the decision as “a blow to firms trying to keep jobs alive during the recession’’.