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Annual leave or sick leave?
There have been some recent developments on the accruing and taking of sick leave and the issue of employees being ill on holiday. Earlier this summer the House of Lords ruled that workers can accrue holiday pay while on sick leave.

A more recent case has ruled that if employees are sick whilst on holiday they can ask to have their annual leave postponed until another time.

The two recent rulings may have a significant impact on employers’ costs. The first relates to the right of employees to accrue annual leave even if they are off sick on a long-term basis.

In the final judgment of a long-running case, the House of Lords ruled that workers who are denied holiday pay while on sick leave can claim to an employment tribunal for unauthorised deduction from wages under the Employment Rights Act 1996.

This ruling follows on from a European Court of Justice (ECJ) decision in January this year, that staff do accrue paid holiday for their entire sick leave, and must be allowed to take it on their return or be paid in lieu of it if their employment ends.

But as the ECJ ruling did not comply with the UK's existing Working Time Regulations, which requires employees to use all holiday within a year or lose it, the case was passed to the House of Lords to decide whether the decision by the ECJ applied in the UK. The House of Lords confirmed that the ECJ ruling did override the Working Time Regulations

In another case, the ECJ, has gone a step further and held that if a worker has scheduled holiday (under the Working Time Regulations) but is unable to enjoy it due to sickness, the employer must allow the worker to take the holiday at another time if they make such a request, even if it means carrying forward the holiday entitlement to the following holiday year. This adds more confusion to the situation. To avoid employees taking undue advantage of this decision, employers are advised to review their sickness absence management arrangements.

If you need more advice on this aspect of managing your staff contact Cherington HR on 01684 594773.
Posted on 19 Nov 2016


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