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Workers Could Reclaim Holiday When They've Been Sick

The European Court of Justice has held, in the case of Pereda v Madrid Movilidad, that if a worker is sick during a period of annual leave, he is entitled to take the affected period of leave at another time, if he would not otherwise have had (free of sickness) the minimum period of annual leave provided for by the Working Time Directive (“the Directive”) – including, if necessary, if this means taking the relevant number of days’ holiday during the next leave year.

The Directive provides that workers are entitled to a minimum of 4 weeks’ holiday in any leave year. The Working Time Regulations (“the Regulations”), which implement the Directive into UK law, are more generous, currently giving workers the right to 5.6 weeks’ annual leave (28 days for a full time worker).

The Regulations currently expressly prohibit the carrying over of untaken holiday entitlement under the Regulations (as opposed to any additional contractual holiday entitlement) from one leave year to the next.  The element of the decision in Pereda relating to taking leave in a subsequent holiday year would therefore appear only to currently benefit public sector workers in the UK (to whom European law apples directly), and not private sector workers.  There is also an argument that the drafting of the Regulations means that private sector employees will not be able to insist that any days of annual leave affected by sickness can be retaken at a later date at all – but this is less clear.

To the extent that the principle in Pereda can be relied on in the UK by employees in the public or private sector, it is arguable that there is a right to take at least 5.6 weeks’ annual leave unaffected by sickness, as opposed to the 4 week period provided for under the Directive.

If an employee returns after a holiday (including if it was a fixed shutdown period outside which there are normally limited, or no, opportunities to take annual leave) and informs the employer that he was ill for all or part of the period, the employer will have take a view as to whether or not it accepts that the employee was genuinely ill and whether to allow him to re-take the affected period of holiday at a later date.

Employers should proceed with caution before alleging an employee’s claims of sickness are believed to be false, at least without reasonable grounds for suspicion. The employee may treat such allegations as a breach by the employer of the implied term of trust and confidence, resign and make claims based on constructive dismissal.

An area for consideration will be in relation to reporting procedures. If an employee is absent from work on holiday, should he be expected to comply with normal sickness reporting requirements? Employers may wish to consider amending their current procedures to remove any ambiguity, e.g. by making it clear that absence must still be reported by a given time (GMT) on each day (or as soon after as is reasonably practicable thereafter, if the employee is abroad and there would be reasonable difficulties in complying with the rule due to time differences) and supported by medical evidence.

For statutory sick pay (“SSP”) purposes, employers cannot insist that employees report sickness absence by a given time on the first day of absence (although this can be insisted upon in respect of subsequent days); and if employer’s do not expressly specify notification rules, the default position is that employees will have a full 7 days to notify sickness absence.

For SSP purposes, employees can self-certify in respect of up to 7 days’ incapacity and, thereafter, must produce medical certificates.  Employers can, however, insist upon medical certificates being produced earlier for the purposes of their own contractual sick pay schemes or otherwise their absence procedures.  Consideration might be given to expressly stating that any incapacity claimed during a period of holiday must be supported by a medical certificate and/or (in the case of employees who normally benefit from more generous rules) that periods of incapacity while on holiday will be paid only in accordance with basic SSP entitlement (including that there will be no payment during the first 3 ‘waiting days’ of incapacity.

(However, employers should note that SSP can only be denied if employees unreasonably delay in providing notification of absence, but not merely for a delay in providing the relevant evidence of incapacity.)

Employers should note, further, that changes in their rules relating to holidays and sickness might only draw the attention of employees to rights that would otherwise have been overlooked.

Employers are, of course, still entitled to monitor employees’ sickness levels in the normal way and, subject to a fair procedure and consideration of the individual circumstances of the employee, unacceptable levels of sickness absence can be a fair reason for dismissal.  A well drafted and properly applied absence policy can make the monitoring of levels of absence, and discouraging excessive or otherwise casual absences at all times, quite straight forward.

jennifer.gibson@lblaw.co.uk - 01952 211025