25-01-2008
Holiday Pay for Long Term Sick
In April 2005 the Court of Appeal held that the right to statutory paid holiday under the Working Time Regulations does not give a right to accrue holiday whilst an employee is on long term sick.
Some of you may remember that this also applied to extended additional maternity leave and other circumstances where the employee was out of the workplace for a long period of time. The reasoning in terms of long term sick was that an employee who was not working for twelve months for example did not need the rest prescribed in the Working Time Regulations.
The case was appealed and the House of Lords sent it to Europe and in particular the Advocate General. It is important to note that the full European Court of Justice usually follows the opinion of the Advocate General.
The Advocate General has ruled that the entitlement to paid holiday does indeed accrue while an employee is absent on sick leave. However, workers who accrue holiday may not take the holiday while they are on sick leave. In short, an employee on long term sick will accrue holiday but will not be permitted to take it. Therefore the employer will be faced with either a long term sick individual returning to work having accrued large periods of holiday that they must now take or paying them in lieu.
Indeed, an employee who has been on long term sick for say one year and is then dismissed because of his absence will be entitled to payment for the year’s worth of holiday accrued while he has been off.
There are of course some employers who will cry out that this decision is preposterous.
I am critical of the decision which will encourage small employers to break the law and simply not pay the employees such accrued holiday when they are long term sick unless they are sued.
In addition it is likely to encourage larger employers to remove sick pay entitlement and sack ailing workers sooner rather than later. It can in no way be of benefit to employees (in a general sense) and is certainly not a benefit to employers.
In addition it raises the question as to who pays such accrued holiday when an employee begins to benefit from an entitlement under a Permanent Health Insurance Scheme (PHI). An employee who cannot be dismissed because he has an entitlement to PHI (or a potential entitlement to PHI) will, if this law is taken literally, continue to accrue holidays perhaps for years while not being an employee.
This opinion, with respect to the Advocate General, would appear flawed in so many respects and I am sure that many of my clients will see it as a blow to employers without being a real benefit to employees.
Some of you may remember that this also applied to extended additional maternity leave and other circumstances where the employee was out of the workplace for a long period of time. The reasoning in terms of long term sick was that an employee who was not working for twelve months for example did not need the rest prescribed in the Working Time Regulations.
The case was appealed and the House of Lords sent it to Europe and in particular the Advocate General. It is important to note that the full European Court of Justice usually follows the opinion of the Advocate General.
The Advocate General has ruled that the entitlement to paid holiday does indeed accrue while an employee is absent on sick leave. However, workers who accrue holiday may not take the holiday while they are on sick leave. In short, an employee on long term sick will accrue holiday but will not be permitted to take it. Therefore the employer will be faced with either a long term sick individual returning to work having accrued large periods of holiday that they must now take or paying them in lieu.
Indeed, an employee who has been on long term sick for say one year and is then dismissed because of his absence will be entitled to payment for the year’s worth of holiday accrued while he has been off.
There are of course some employers who will cry out that this decision is preposterous.
I am critical of the decision which will encourage small employers to break the law and simply not pay the employees such accrued holiday when they are long term sick unless they are sued.
In addition it is likely to encourage larger employers to remove sick pay entitlement and sack ailing workers sooner rather than later. It can in no way be of benefit to employees (in a general sense) and is certainly not a benefit to employers.
In addition it raises the question as to who pays such accrued holiday when an employee begins to benefit from an entitlement under a Permanent Health Insurance Scheme (PHI). An employee who cannot be dismissed because he has an entitlement to PHI (or a potential entitlement to PHI) will, if this law is taken literally, continue to accrue holidays perhaps for years while not being an employee.
This opinion, with respect to the Advocate General, would appear flawed in so many respects and I am sure that many of my clients will see it as a blow to employers without being a real benefit to employees.
