Long-term sickness - New Ruling impacts heavily on employers
The European Court of Justice has recently ruled that employees away on long-term sickness absence are entitled to accrue annual leave whilst absent. This follows a long-running dispute over the situation and is likely to cost employers more than they had bargained for.
Under the ECJ ruling, employers must give staff a reasonable chance to take holiday they accrued while off sick, but may mean that they have a significant amount of leave to carry forward on their return in addition to their entitlement for the following leave year.
However, if employees never return to work - which is often the case on long-term sickness cases - they accrue that holiday which is then paid out as a lump sum on termination of employment. It is a cost which many employers, especially smaller firms, can't afford, particularly in the economic climate.
Under the European Working Time Directive, workers have a right to a minimum period of paid annual leave. The ruling has said that, "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.”
Such liabilities may encourage employers to think twice before providing long-term sick arrangements for their staff in the future. Get in touch, if you wish to review your sickness payment arrangements.
Posted on 19 Nov 2016