Human Capital Services Business Matters 27th January 2009
STOP PRESS: Holiday Pay Entitlement During Long Term Sickness
The European Court of Justice (ECJ) has recently delivered its opinion in the conjoined cases of Stringer and Others v HMRC and Schultz-Hoff v Deutsche Rentenversicherung Bund on the effect of long term sick leave on a worker’s right to annual leave by virtue of the Working Time Directive. This sounds complex but has important ramifications for all employers. Read on!
The questions to be determined by the ECJ in this case were:
1. Are workers entitled to take paid statutory holidays while they are off sick?
2. Are employees who have been off sick for part, or all of a leave year entitled to payment in lieu of accrued statutory holidays if the employment relationship terminates?
The ECJ ruled in respect of the two questions as follows:
1. That it is for Member States (in our case the UK Government) to decide whether a worker should be permitted to take annual leave during a period of sick leave. What this means is that we need to await further guidance when the Stringer case is finally decided upon. However, it is most likely that the Government will rule that annual leave will be permitted.
2. The European Court of Justice ruled that the right to accrue leave does not stop at the end of the leave year, where the worker has been unable to take leave because they have been on sick leave. The employee will either be able to take the annual leave on their return to work, or receive a payment in lieu, if the employment relationship is terminated.
In the meantime, where does that leave employers? HCS Top Tips are as follows:
• Ensure that you manage sickness absence effectively and efficiently in order that it is not unnecessarily protracted.
• Employees on long term sickness absence should accrue annual leave.
• Review your contracts, policies and procedures and determine any implications of the decision that is likely to follow regarding the taking of annual leave during sickness absence and make sure that any absence management policy is robust, allowing you to manage absence effectively and in a way that aids rather than stifles your business.
• Plan a return to work for employees to include using accrued annual leave to assist in a phased return to work.
HCS has already started to review policies for clients and is providing advice – if you would like to discuss how we can help your business, call us on 0141 776 6456
28 January 2009, webeditor
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