UK: Further Extension To Workers’ Holiday Rights

The holiday rights of workers who fall ill while on holiday, or are absent on long term sick leave, have been extended further by two recent rulings.

Rights of Workers Who Fall Ill While on Holiday

It was already possible for a worker, who became sick before the start of a scheduled holiday, to recategorise the holiday as sick leave and take the holiday at a later date.  In certain circumstances, the worker could even elect to take the recategorised holiday in the next holiday year.

The Court of Justice of the European Community (CJEU) has clarified that a worker who falls ill while on holiday can also now do this.

The CJEU considered that it would be arbitrary, and contrary to the stated objective of holiday (i.e., allowing a period of rest, relaxation and leisure), if workers who fell ill while already on holiday were denied the right to recategorise in this way simply because the onset of the illness occurred during, rather than before, the period of leave.

UK workers who fall ill while on holiday will, therefore, be entitled to sick leave (and pay) during any period of illness that coincides with a period of holiday.  Any worker who falls ill in this way will not "lose" the holiday during the period of illness but will be entitled to take that leave at a later date, when he has recovered. 

"Rolling Over" Holiday Time for Workers on Long Term Sick Leave

The Court of Appeal has also provided helpful clarification of the circumstances in which workers on long term sick leave are entitled to accrue, and "roll over", multiple years' holiday entitlement and pay.

The Court has confirmed that workers on a period of continuous sick leave, which spans more than one holiday year, do not need to make a request to take or carry forward holiday to avoid losing it at the end of the current holiday year. 

In such circumstances, an employer should presume that the worker is prevented by illness from taking holiday.  Accordingly, in keeping with earlier guidance from the CJEU, the individual does not lose the holiday.  Instead, it is rolled forward to the next holiday year and can be taken at a later date.  The exception to this is, of course, if the worker's contract is terminated before an opportunity to take the holiday arises, in which case a payment should be made in lieu.

What Does This Mean for Employers?

Sick employees on holiday

The right to recategorise holiday as sick leave is potentially open to abuse by workers.  What can wary employers do to reduce this risk?

We suggest that employers:

  • Revise holiday policies to clarify the process for notifying the employer of sickness absence that occurs during a holiday;
  • Withhold pay, in accordance with the statutory sick pay regime, during the first three days of self-certified sickness absence if such absence occurs during a holiday and;
  • Consider imposing a higher evidential requirement (e.g., production of a doctor's certificate) that must be satisfied by employees who fall sick on holiday, however short the period of illness, before they become entitled to any enhanced contractual sick pay. 

Long term sickness and holiday

The focus here is on whether the worker has had an "opportunity" to take the holiday. 

Sick leave is presumed to preclude that opportunity but, on returning to work, the employee should be given the opportunity to take the leave that accrued during the period of illness.  In our view, if the worker then failed to take that opportunity, prior to expiry of the existing holiday year, the accrued but untaken holiday would be forfeit. 

We therefore recommend that employers:

  1. if commercially desirable, require employees returning from long-term sick leave to use up accrued holiday before the end of the current holiday year; and
  2. ensure that template contracts are clear as to the notice entitlements of employees in such situations, because it is possible, with careful drafting and subject to the length of notice to be given, to avoid paying full notice pay in circumstances where sick pay has already been exhausted. 

In light of the Court of Appeal's decision, some employers may wish to amend their policies to reflect the automatic roll-over of holiday in situations of long-term sickness absence.  However, there will be strategic matters to be considered and other employers may prefer to deal with the, fairly rare, circumstances in which this issue arises on a case by case basis.

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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