Giving paid holidays to employees off work sick
We get asked a lot at Metis HR about employers giving paid holidays to employees who are off work sick. The European Court of Justice ruled that workers were entitled to accrue statutory minimum holiday entitlement while on sick leave. Then carry that leave over into another year. However, they could only do that if they were too ill to take it and prefered not to take it during their sick leave.
If an Employee chooses to take their holiday leave entitlement while on sick leave, they will be paid normal holiday pay rather than company or statutory sick pay. This can sometimes be less or none depending on how long they have been off sick. If an employee qualifies for SSP, they would continue to receive this during any annual leave pay period. However, you cannot insist an employee to do this.
Carrying Over Unpaid Leave
The issue of carrying over unused leave that was accrued because of sickness absence into the next leave year was in doubt. The Working Time Directive conflicted with the 2009 decision by the European Court of Justice. In UK law workers are required to use their holiday entitlement within the leave year or lose it. Whereas the EC Directive is silent on this issue. However, ECJ case law has said that carry over of leave is allowed.
The House of Lords ruled that people who are denied to accrue holiday pay while on sick leave can make a claim to an Employment Tribunal for unauthorised deduction from wages. This could come with claims possibly being back-dated to 6 years. This ruling supersedes UK WTD Legislation and UK Tribunal decisions.
The Court of Appeal
The Court of Appeal ruled in 2012 that employees on long-term sick leave are automatically entitled to carry forward their annual leave into the next holiday year. They do not have to request to do this and are entitled to be paid for this outstanding leave if their employment is terminated.
However, the ruling states employees can only role over the 4 weeks statutory leave entitlement. This is provided by the original EU Directive and not the additional 1.6 weeks that is provided by UK Regulations.
You can be confident to know that the carryover of holidays does have a time limit set to them.
- Where employment has ended, the worker is only entitled to a payment in lieu for untaken holiday. This can be carried forward up to 18 months after the end of the relevant holiday year. If the holiday accrued in a holiday year which ended more than 18 months previously, there will be no entitlement to pay.
- Where employment continues. – The worker is only entitled to take paid holiday which has been carried forward up to 18 months after the end of the relevant holiday year. It cannot go back to prior holiday years.
So, if you find yourself wondering what to do about giving paid holidays to employees who are off work sick, give us a call. 01706 565332
Metis HR is a professional HR Consultancy based in the North West of England supporting clients across the country. We specialise in providing outsourced HR services to small and medium-sized businesses. Call us now on 01706 565332 to discuss how we may help you.