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Employee entitlements to annual leave and notice pay whilst sick

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.

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10 Responses to “Employee entitlements to annual leave and notice pay whilst sick”

  1. Linder Myers December 19, 2012 at 4:36 pm #

    This comment has now been removed at the request of the authour

    • Jim Barnes December 19, 2012 at 5:39 pm #

      The law very clear in this case, a formal discussion with your employer should resolve this issue at nil cost to both parties.

    • Alan Lewis December 20, 2012 at 11:15 am #

      There are special rules under Sections 86-91 of the Employment Rights Act 1996 which are relevant to employees who are unable to attend work because of sickness during their notice period.

      These Sections provide an entitlement to an employee to receive their full pay for their statutory period of notice regardless of whether they have exhausted the right to contractual sick pay and/or statutory sick pay.

      However, these rules do not apply where the notice to be given by the employer to terminate the contract is at least one week more than the statutory minimum period of notice that the employee is entitled to.

      Therefore, I would need to know how long you have been employed by the NHS and precisely what your contract says in relation to your entitlement to notice. If, for example, you have been employed by the NHS for a period of less than 10 years and your contract provides that you are entitled to 12 weeks’ notice, then you would not be entitled to full pay for the period of your notice.

      • Jim Barnes December 20, 2012 at 12:20 pm #

        Hi Allan
        The orignal comment refers to an NHS employee who has been in employment for over 25 years as a nurse. He has been on long term sickness and has also exahusted his statoury sick pay his application for illhealth retirement has been accepted by the NHS pension agency . His notice by his NHS contract is 12 weeks.his employers are refusing to pay the notice peroid, any advice appreciated.

  2. fudge December 20, 2012 at 8:36 pm #

    Hi Allan,
    The individual I am refering to has worked for the NHS for 25 years, his contract has been terminated on ill health, he has exhausted both statoury and contractural sick pay.The nhs notice is 12 weeks for his lenght of service could you please advice if he is entitled to payment in liue of notice and for this period.

  3. Alan Lewis December 21, 2012 at 3:54 pm #

    Ordinarily, if this individual had been given notice of termination by his employer, he would be entitled to payment in lieu of notice (subject to me having sight of his contract). However, I note that you refer to an application for ill-health retirement. If he applies for such ill-health early retirement it may be the case that his employment was not formally terminated by his employer. If this was the case he could not claim a payment in lieu of notice for 12 weeks. Much will depend upon the terms of the ill-health retirement scheme and the correspondence the employee has received from his employer.

  4. Gill May 12, 2014 at 10:19 am #

    I have been off work for around 12 years. My employer is a large American pharmaceutical company. The company accepts that my ill health was caused by over-work. I receive a reduced salary through the companies’ insurance scheme but it was only last year I found out I was entitled to full holiday pay. I have missed out on several thousand over the years. Is the employer responsible to inform an employee of the right to holiday pay?

  5. Donna March 18, 2015 at 4:33 pm #

    We have received a letter for a long term sick employee’ doctor, advising that he should take early retirement through ill health as he is not going to be able to return to his role and there are no others that we can offer or adjustments etc. Would he still be entitled to 12 weeks notice + holiday payment? He has been absent from work for 17 consecutive months and has not received any SSP entitlement since this was exhausted. (He will be 64 years old in a couple of months.) We are following the advise of the doctor and know that there is no way he will be able to return to work, so I am unclear whether we are still expected to pay out? He has been employed for 25 years with this company. Any advice you could give would be welcomed. Thanks

    • Linder Myers Solicitors March 24, 2015 at 2:46 pm #

      Hi Donna, I have passed your enquiry to a member of our employment team who will be in touch with you shortly.

  6. Dan June 19, 2015 at 5:13 pm #

    I have a question about extending the effective date of termination. I was given a formal notice of redundancy from my UK-based employer with a notice period end date of 17 August (I believe this is called the Termination End Date). Are there ways I can extend that termination end date to be later? If it were 11 days later, I would receive an additional 1/2 month of redundancy pay (per my company’s policies). If it were 2 and a half months later, I would receive a very significant retention bonus I was given many years earlier (but which would not vest until end of October 2015), but which I will not receive now because the notice period end date is just before vesting date. Thank you. Dan

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