HOLIDAY PAY WHEN ON SICK?
There has been much media hype over the European Court of Justice’s (“ECJ”) latest Judgment. They have now ruled that workers who go on sick leave during a period that has been scheduled as annual leave (and is part of the statutory minimum holiday entitlement) should be allowed to reschedule their holidays, even if that means allowing annual leave to be carried forward into a subsequent holiday year.
The explanation … wait for it! …. the purpose of paid annual leave is to enable a worker to “rest and enjoy a period of relaxation and leisure”, by contrast the purpose of sick leave entitlement is to ensure that he “can recover from being ill”.
Whilst this is perhaps welcomed by some workers, employers will rightly be less enthused and as ECJ decisions go this is a bad one for employers. Please “don’t shoot the messenger!!”
More Time Off
This decision clearly creates opportunities for employees to take more time off. Those on pre-booked leave could on return, claim to have been on sick and ask for those days to be classified as sickness absence such that the corresponding amount of days holiday are taken at a later date. Whilst it may only be the occasional "bad penny" employee who does this think about the consequences, specifically the possible resentment from colleagues!
If the absence is reclassified as sickness absence, then sick pay may be due. In the absence of a contractual sick pay scheme SSP rules apply. The first 3 qualifying days would be unpaid followed by Statutory Sick Pay (currently £79.15 per week) assuming that the Employee meets the qualifying conditions. Caution will need to be exercised with discretionary sick pay schemes. Cynically, however, one might think this situation is more likely to occur where employees have the benefit of a contractual sick pay scheme that pays full pay for the first few weeks of any sickness absence.
If the worker was not on holiday, employers would accept a self-certificate for the first week of sickness, but what evidence of illness must the worker produce in order to have their leave reclassified?
Until the courts say otherwise, our view is that employers are entitled to require workers to produce convincing evidence of their illness whilst on holiday and that it would have rendered them unfit for work before allowing workers to ‘reallocate’ holidays.
Remember that this judgment is reinforcing the right for workers to take the Statutory Minimum Holiday. If you offer workers holiday over and above the statutory minimum, employers could legitimately refuse to reclassify holidays for the same number of days that the employer provides over and above the statutory minimum.
For example, if an employer offers an employee a total of 33 days (25 days + 8 bank holidays), and the statutory minimum is 5.6 weeks (28 days including bank holidays) the employer is giving 5 days more holiday than the statutory minimum holiday requirement. If an employee has already taken three weeks off (including Bank Holidays) and then takes a 2 week holiday during which they say they are sick for 5 days of that two week holiday, they may say they have had 20 days leave so far and 5 days sick. The employer can refuse to reclassify those 5 days because the employee has a further 8 days to take which, when taken will ensure the full statutory minimum of 28 days is met. There is no requirement to 'credit back' days claimed to be sick over and above the statutory minimum.
Confused? - We are not surprised. As usual the law and case law on holiday entitlement becomes increasingly complex. Do call us for assistance if you have any queries in this area – 08456 446006.