Employees on long-term sick to miss out on holiday pay!

The law relating to the holiday rights of employees on long-term sick leave has been an area of uncertainty for a number of years. However, on 3 November 2011 the Employment Appeal Tribunal (EAT) ruled that if employees on long-term sick fail to request their holiday leave (i.e. be paid for their entitlement) they will lose their right to be paid for it.

The cat was put among the pigeons by the "Stringer" decision in 2009 which confirmed that an employee on long-term sick would continue to accrue annual leave under the Working Time Directive despite not working. The decision went on to confirm that at the end of a leave year, any employee on sick leave who had been prevented from taking their annual leave, must be allowed to carry it over to the next holiday year and to take it at a later date. This decision clarified the position where an employee had been prevented from taking annual leave, but the case failed to address the issue surrounding an employee who failed to request their payment.

The latest decision will be seen as a welcome relief for employers who now have clarification that an employee will lose their right to holiday pay if they fail to request a payment within the relevant holiday year.

This is the latest example of a pro-employer decision and the more sceptical among you will not be surprised that the majority of employers will remain tight-lipped with regard to informing employees of their right to request holiday leave. I expect we will see a campaign from pro-employee lobbyists for a duty to be imposed on employers to notify their employees of their right to request a payment while on long-term sick leave.

The message for employers is to take active steps to manage long-term absence as opposed to ignoring the situation and allowing employees to accrue holiday leave. Surely it is preferable to assist an employee to return to work, or to dismiss if appropriate when compared to writing a cheque for a year’s worth of holiday pay.

If you require advice on managing long-term absence or any other any employment related matter, please contact either James Twine on 01752 292351 or Eoin Fowell on 01752 292350.