The European Court of Justice has decided that an employee must be given replacement holiday if he or she falls sick whilst taking annual leave. This decision has been greeted with dismay by employers, but the consequences may not be as bad as first appears. We explain why in our latest issue of Employment News.
The decision in the case of Mr Pereda, an employee of the
Spanish company Madrid Movilidad SA, was not surprising. Previous
ECJ cases (Stringer and Schultz-Hoff) have established that annual
leave is an inalienable right and that an employee who is not able
to take holiday because of long term sick leave does not lose the
entitlement, but should be permitted to take it at a later stage.
Mr Pereda's case is a logical extension of this argument.
His circumstances were somewhat different from those of most UK
employees making holiday requests from their employers. The system
for organising annual leave at Madrid Movilidad SA is set out in a
collective agreement with the works council. In order to ensure
that there is enough cover, annual leave rotas are proposed in
advance by the works council and then approved by the company.
Further changes can normally only be made with 45 days'
notice.
Mr Pereda was scheduled to take annual leave from 16 July to 14
August. However, he had an accident on 3 July, which forced him to
be on sick leave until 13 August, with the result that all but two
days of his annual leave coincided with his sick absence. He
therefore asked the company to grant him an alternative period of
annual leave from 15 November to 15 December. This request was
refused without reasons.
Mr Pereda challenged the decision before the labour court in Madrid. The court referred the issue to the ECJ to establish whether it is contrary to the Working Time Directive for a worker who is on sick leave during a scheduled period of annual leave to be denied the right, following his recovery, to take the annual leave at another time. The ECJ decided that the company's position was contrary to the Directive, but the decision has ramifications for all holiday requests, not only those made in accordance with collective agreements.
In the UK, public sector employees will be able to rely on the
decision directly. Private sector employers are governed by the
Working Time Regulations, which currently do not reflect the
decision. It is not clear whether the Government will take steps to
amend them and until this is clear private sector employers may
wish to wait before taking steps to respond.
In the wake of the decision, the most obvious practical problem for
employers is the malingering employee who uses the ruling to
request additional time off work, but has not in fact been ill
enough to remain away from work. Employers will need to give some
thought to the management of these situations. They may already
have robust procedures in place for certification of sickness but
these may now need to be extended, for example to cover situations
where an employee has fallen sick, or alleges that he has fallen
sick, whilst on holiday but away from home and his usual GP (for
example on holiday outside the UK).
The current 'self-certification' rules form part of the
statutory sick pay (SSP) regime and employers are not permitted to
impose more stringent requirements that might deprive an employee
of SSP. However employers can impose stricter sickness
certification rules for an employee who is seeking additional
holiday on the basis of an alleged illness during annual leave, for
example by asking all such illnesses to be medically
certified.
Employers also need to bear in mind that it is not uncommon for
conscientious employees who have been working hard and are 'run
down' or overtired to be ill whilst on holiday, as they may be
more susceptible to colds and infections. The Pereda ruling may
encourage employees in this category to ask for holiday to be
rescheduled when in the past they might have hesitated to do
so.
The extent to which employees in any category are inclined to take
advantage of the ruling will also depend on how generous the
employer's sick pay policy is. Whilst annual leave must be
paid, sick leave need not be (over and above SSP). A sick pay
policy that is not overly generous may be the most effective way of
limiting the impact of the case, although employers need to
exercise care before imposing any changes in policy. Entitlement to
contractual sick pay might form part of the employee's contract
of employment and, if so, employers will not therefore be able to
make any changes unilaterally or without full consultation.
Finally, many employers already have, or have had in the past,
provisions in their sickness or holiday policies that permit
employees to take holiday at a later date if they are ill during
annual leave. Hence many employers already have experience of
managing a policy of this kind although they may also experience a
surge in requests given the widespread coverage of this
decision.
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.