legal updates
Monday, 13 Apr 2009
holiday leave during sickness absence
The law relating to holiday rights for workers on long-term sickness absence has been in a state of uncertainty for some time, however, a recent case which reached both the European Court of Justice and the House of Lords has now clarified the matter. This case established the principle that workers on long-term sickness absence will continue to accrue holidays throughout their period of absence.
Thus even if a worker is off sick they continue to build up entitlement to paid holidays under the Working Time Regulations 1998 (“WTR”). The case also confirmed that not only does holiday entitlement continue to accrue but that workers on sick leave can give notice to their employer to designate 5.6 weeks’, this being the statutory minimum period of annual leave which a worker is entitled to in any leave year, as holiday even during their period of absence. This outcome will lead to additional costs for employers, as workers on long-term sick leave who have used up their sick pay will be entitled to be paid in respect of their statutory holiday entitlement. It should be noted that a worker who wants to designate some of their absence as holiday must give notice that is twice as long as the amount of holiday they wish to take.
Additionally, at the end of a leave year, a worker on sick leave who has not taken annual leave must be allowed to carry it over and take it at a later date. To avoid employees building up holiday entitlement by carrying it over employers should make it clear that workers are expected to ‘use it or lose it’ and all holiday entitlement should be used in the relevant year unless there are compelling reasons as to why it could not be used.
Whilst workers will be entitled to be paid in lieu of accrued holidays on termination of their employment, even when they have been off sick for some or all of the leave year, the employer is only required to pay the statutory minimum thus employers would be wise to review their policies if they provide a more generous contractual entitlement to limit this more generous allowance in the event of long-term sickness absence.