Holiday Pay for Workers on Sick Leave - January 09
The European Court of Justice has recently given a long awaited ruling on the entitlement to holiday for workers on sick leave.
The basic principles of ECJ ruling are that:
• Holiday entitlement continues to accrue during sick leave;
• Annual leave will not be lost at the end of the leave year, even if the worker has been off sick for the entire leave year; and
• Where employment ends during the sickness absence, a payment must be made in lieu of leave that has accrued while off sick.
The House of Lords now has a number of resulting issues to be determined in accordance with national law. These include deciding whether workers should be able to take annual leave while they are off sick, or whether an employee who is off sick should alternatively be entitled to carry over unused leave into the next leave year, which is currently contrary to the Working Time Regulations.
Although these issues remain to be clarified, this decision is clearly a change from the current legal position and all employers should be aware that employees will now accrue leave while they are sick. In addition, when dismissing employees for whatever reason, payment must be made in respect of holiday accrued while sick. It is important to note that employees must no longer lose the benefit of leave accrued at the end of a leave year, although it is yet to be determined whether this may be taken or carried over.
This will obviously result in an additional administrative burden as well as a financial one, and will mean that sickness policies and procedures need to be reviewed and possibly updated. The House of Lords will make a decision regarding whether leave will be taken during sickness or carried over, or whether employers will have the choice. At this point, a clear policy will need to be introduced by employers to clarify the arrangements. A further ebulletin will be issued once this decision is made. In the mean time, employers should ensure that sickness is not lost at the end of a leave year.
If you need any help reviewing your policies or would like further advice on this issue, please contact a member of the Rickerbys employment team.
|
|