Now that the peak holiday season is over, many UK employers will be breathing a sigh of relief. Holidays can cause them a great deal of stress for a variety of reasons, not least because of the legal confusion around the interplay between holidays and sickness absence.
In the “old days”, many employers tended not to differentiate between the various types of absence, and reacted less than graciously if somebody who had been off sick put in a holiday request. “Haven’t they had enough time off?” the indignant manager would ask. Those days are gone; the law recognises that sickness absence is time off to enable an employee to recover from illness or injury which prevents them from working, whereas holiday is time off for rest, relaxation and leisure.
However, the legal position regarding the interface between sickness and holidays has been muddled for some time, which is not helpful to employers.
Issues can arise both when a person falls ill before or during their holidays, and when somebody who is off sick for a long time wishes either to take holiday or carry forward their unused holiday entitlement to the following year.
A couple of recent cases have clarified certain points, although some grey areas still remain.
The European Court of Justice has recently confirmed in a Spanish case, that if an employee falls ill while on holiday, he/she has the right to have those days reclassified as sickness absence, and take the holiday at a later date. This is a logical extension of previous rulings that somebody falling ill just before going on a pre-booked holiday should be allowed to reschedule that holiday so they can take it when they’re fit enough to enjoy it.
But if a person becomes unwell or injured while on holiday, perhaps abroad, there are practical issues to be considered. What kind of proof should an employer ask for, to substantiate claims of illness? How can the duration of the illness be determined for sick pay purposes? What if the employee is in a place where it is difficult to get a medical certificate? What about notification procedures? Normally, an employer will expect a telephone call on the first day of sickness; is it reasonable to ask for a call from an employee who is on holiday? What if they are in a remote location with no mobile phone reception?
To avoid creating a “malingerer’s charter”, these situations should be thought through and covered in your Absence from Work policy. Making it up as you go along, or waiting until the situation has arisen before giving it some thought, is never good employment practice. I suggest it is sensible to require contact on the day that the person falls ill other than in exceptional circumstances, and to ask for some form of documentary evidence of illness covering the entire time the person wishes to have reclassified as sick leave, although precisely what evidence is acceptable may need to be judged on a case-by-case basis. And when the person comes back, a Return to Work interview will be helpful to get a fuller explanation of what has happened, to ensure that the outcome is fair and appropriate for both the employer and the employee concerned.
Moving on to the vexed question of accrued holiday entitlement when people are on long-term sick leave, a Court of Appeal case in the UK has now clarified that unused holiday is carried forward automatically from one year to the next, and is not dependent upon the person specifically asking for it to be carried forward. Employers cannot say: “Use it or lose it” in sickness situations.
Carried forward holiday entitlement is particularly contentious when people are dismissed following long term sickness absence and there is a dispute over how much pay is due in lieu of unused holiday. Arguments have centred on whether only the current year’s unused holidays need to be compensated for, or whether entitlement from previous years also counts, and if so whether there is any cut off point. Whereas the situation within the UK is still unclear, the ECJ in another recent case has suggested that 15 months may be a reasonable time period. Until the Government’s promised amendment to the Working Time Regulations is enacted, employers may do well to err on the side of caution and pay in lieu of all holiday unused over the 15 months before the dismissal of an employee on long-term sick leave.
Although there are still some unresolved areas, here is some practical guidance and factual information to help you avoid disputes in your company:
- Statutory holiday entitlement (5. 6 weeks per annum, i. e. 28 days for somebody who works 5 days per week) continues to accrue during periods of sickness absence, including long term absence extending beyond a year
- If an employee is on long-term sickness absence, he/she may request and take holiday. Employers should make it clear what kind of notification procedures they need for administrative purposes (e. g. the completion of a holiday request form) and consider reminding employees on long-term sick leave of the opportunity to take holiday (health permitting) to avoid a large build up of unused entitlement
- Accrued unused statutory holiday entitlement may be carried over to the following holiday year if the person is unable to take it due to sickness, without the person needing to ask for this to happen
- If an employee falls ill or is injured prior to a pre-booked holiday, he/she is entitled to reschedule that holiday, and if unable to use it by the end of the holiday year, may carry forward that entitlement to the following year
- If an employee falls ill or is injured during a pre-booked holiday, he/she is entitled to have the period of illness reclassified as sickness absence, and to reschedule the balance of that holiday and carry it forward to the following year if necessary. Employers may ask for notification and documentary evidence, as in any sickness situation
- Payment in lieu of unused holiday entitlement may only be made when the employment is terminated. It may be sensible to pay for all holiday accrued but not taken over the previous 15 months, until the position is definitively resolved under UK legislation
- A review of existing Absence Policies to cover such tricky situations is highly advisable!