UK: Holiday & Sickness – No Welcome Break In Their Relationship!

Last Updated: 9 July 2012
Article by Adam Grant

If an employee falls ill during a period of paid annual leave is it just bad luck or should they be allowed to reschedule any leave days on which they were sick for later in the year? The ECJ was asked to consider exactly this point in the recent case of Asociación Nacional de Grandes Empresas de Distribución (ANGED) v Federación de Asociaciones Sindicales (FASGA) and others ("the ANGED case").

Background

It was established in the ECJ case of Pereda v Madrid Movilidad SA that if a worker has prearranged statutory annual leave but this then coincides with a period of sickness absence, the worker has the option to reschedule the leave. If necessary, the worker can carry over any statutory leave which was not taken as a result of sickness to the next leave year.

However, in Pereda, the worker concerned was on sick leave before the period of planned statutory annual leave began. In the ANGED case the ECJ considered whether workers who fell ill during a period of statutory leave should be permitted to reschedule those days on which they were ill.

The ANGED case

The dispute arose in relation to a Spanish collective agreement for a number of department stores. While the agreement expressly allowed workers to reschedule periods of paid holiday where it coincided with periods of temporary incapacity due to pregnancy, workers were not permitted to reschedule holiday by reason of general ill health.

Various trade unions took the matter to the Spanish High Court where they were successful in obtaining a declaration. However, on appeal by ANGED (the National Association of Large Distribution Businesses), the matter was referred to the ECJ.

Unsurprisingly, the ECJ's ruling was consistent with the previous ruling in Pereda. It held that the entitlement of every worker to paid leave is an important principle of EU law from which there should be no derogations. It made a distinction between the purpose of paid annual leave, to enable the worker to enjoy periods of relaxation and leisure, and sick leave, the purpose of which is to enable a worker to recover from an illness which has temporarily made them unfit for work.

Crucially, the court clarified that the point at which the worker becomes ill was irrelevant and that it made no difference whether the worker was unfit to work before they went on leave or whether they became unfit whilst already on leave. If, therefore, a worker becomes unwell while on leave, they are entitled to reschedule leave for those days on which they were unfit for work. If necessary, these can be taken outside the relevant leave year.

How can an employer reduce the risk of abuse of sickness leave by its employees?

The decision in ANGED comes as no great surprise but it does open up the potential for abuse by employees. For example, what is to stop an employee coming back from a week's holiday claiming that he was unwell for three of his five days' leave and that he therefore wishes to reschedule these days for later in the year or even roll them over to the next leave year? Following the ANGED case, the employer must allow these leave days to be rescheduled. However, how can the employer reduce the risk of abuse of this rule?

  • If company sick pay is being provided, in order to qualify for it the employer could require that sickness be reported in the usual way even if the employee is on annual leave (for example, by contacting their manager by a specific time on the first day of sickness). There is also nothing to prevent an employer making the payment of company sick pay conditional on the production of medical evidence that states that the employee was unfit for work. While an employer should not restrict the employees' rights to reschedule their annual leave, they need only pay them SSP if the employee is unable to produce the necessary medical evidence. However, it may be difficult for employees to obtain such evidence particularly if they are abroad and thus the employer may wish to consider whether they strictly enforce such a policy.
  • If an employer only chooses to provide SSP during sickness absence, employees are less likely to falsely claim that they are unwell on holidays if it means that they will only be paid SSP particularly because they are not entitled to anything until the fourth day of sickness.
  • An employer could choose to adopt a mixed policy so that an employer may be entitled to company sick pay but not when it falls within prescheduled annual leave.

There is a danger that the above policies could lead to mistrust and resentment amongst the workforce and, in some cases, implementing these rules could require changes to contractual terms which can be problematic. The best policy may simply be to monitor sickness absence and warn workers that abuse of the system could lead to disciplinary action against them. Somehow we doubt that this will be the last case on this vexed issue and we will of course update you as and when there are any further developments!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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