What happens to the annual leave employees are accruing while on long-term sick leave? Mark Stevens unravels the holiday pay situation.
An employee cannot be unwell and take their annual leave at the same time. A European Court of Justice case (Asociación Nacional de Grandes Empresas de Distribución (ANGED) v Federación de Asociaciones Sindicales (FASGA), says so, concluding that an employee who is unwell during their annual leave can require their employer to reschedule their annual leave to a later date.
Sickness and annual leave
An employee also continues to accumulate statutory holiday during sickness absence, even if they are absent for the whole holiday year. This means that an employee who has exhausted their sick pay entitlement could request to take paid holiday during their sickness absence. It is generally agreed that employees who are not permitted to take their statutory holiday while they are on sick leave are allowed to carry holiday over to the next holiday year. But what happens in circumstances where an employee becomes sick before or during their annual leave?
The ANGED v FASGA case
A Spanish collective agreement did not allow for workers to postpone annual leave where it coincided with sick leave for general ill heath. The matter was eventually referred to the Court of Justice of the European Union (CJEU).
The CJEU held that EU law prohibits any national laws that do not allow workers to take the annual leave that coincides with a ‘period of unfitness’ at a later date. The CJEU emphasised that the right to paid annual leave was an important principle of EU law with no exemptions.
The CJEU said annual leave enables workers to enjoy a period of relaxation and leisure; sick leave enables workers to recover from an illness. It would go against the purpose of annual leave to allow a worker to reschedule a period of leave only if he was already unfit for work when the annual leave commenced.
The CJEU also held that the rescheduled period of annual leave may be taken outside the relevant holiday year if necessary.
Best practice
Employers will have to be flexible as UK courts and tribunals seek to interpret current UK legislation in a manner compatible with the CJEU’s decision.
With this in mind employers should have in place clear policies setting out the circumstances in which employees will be entitled to reschedule annual leave.
There should also be a requirement that the usual notification and evidence requirements are met by any employee who claims to be sick in whatever circumstances. An employee may be inclined to ‘take advantage’ of the opportunity to reschedule holiday if they are only required to telephone their employer first thing in the morning on their day off in order to confirm that they would prefer to take that day off as sick leave.
Employers would also be wise to have a policy that an employee may only reschedule their statutory holiday entitlement. A full-time employee is entitled to a minimum of 5.6 weeks leave per year. Some employers may offer more than the minimum level of holiday entitlement and, if so, the annual leave policy should make clear that the opportunity to reschedule holiday will only apply to the statutory element of their holiday entitlement, which for a full-time employee would be the first 28 days, pro-rated for part-time workers.
Consequences
The UK courts and tribunals are yet to hear a case from an employee arguing that they were not allowed to reschedule holiday because of sickness. It is likely that where a complaint is well-founded, the tribunal will make a declaration to that effect and may make an award of such compensation that is fair in all the circumstances, having regard to the employer’s failure and any loss sustained by the employee as a result.
Employees could also potentially pursue a claim in an employment tribunal if they suffer a detriment as a result of asking their employer to reschedule their holiday as a result of sickness. An employer should bear this in mind when considering its employee’s request and ensure that it avoids treating the employee differently in the future as a result.
Employers are often frustrated by the ins and outs of employment law, but there’s really no excuse for getting on top of what’s required and making sure you don’t get hauled in front of a tribunal.
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