There has been a flurry of Employment Appeal Tribunal and Court of Appeal decisions recently concerning employees’ entitlement to take annual leave whilst absent from work on sick leave. The changes are relevant to both employers and employees alike.
How have employee entitlements changed?
Long term sick leave will not affect an employee’s annual leave
Employees who have long exhausted their entitlement to sick pay because of a long period of sick leave are still entitled to claim full pay in respect of their holiday entitlement pursuant to the Working Time Regulations. These regulations allow full time workers a minimum 5.6 weeks of annual leave in total.
Annual leave can be converted to sick leave if necessary
The Courts have now confirmed that if an employee falls ill whilst on holiday, they can convert their holiday to sick leave, receiving any contractual sick pay they are entitled to and thereafter take their holiday again when they are feeling well.
In respect of the above, a formal request does not need to be made by the employee in order to carry over untaken leave
There has been a further Court of Appeal decision that has strengthened employees’ positions concerning entitlement to paid holidays during long term sickness absence. This was the case of NHS Leeds -v- Larner. In this case, the Court of Appeal held that a worker who was unable to take annual leave due to sickness did not have to make a formal request in order to carry the untaken leave over into the next leave year in order to be entitled to receive a payment in lieu on termination of their employment. This contradicts what was previously thought; that in order to qualify for payment in lieu of unused holidays; the employee would need to make a formal request to the employer.
Payments in lieu of an employee’s notice period
It is perhaps worth pointing out that employees on long term sickness also have the right to payment in lieu of their notice period on the termination of their employment. This can be particularly significant for those employees who have a long period of service with their employer. In some cases, it could be that an employee receives an entitlement to full pay for 12 weeks on the termination of their employment even if they have long exhausted their entitlement to statutory sick pay. There are some exceptions to this rule – particularly in circumstances where an employee has a contractual entitlement to notice that is greater than the statutory minimum entitlement to notice.