The European Court of Justice has ruled that where an employee is sick when on annual leave, they have the right to take sick leave and reschedule the annual leave. Matthew Tom explains what this means for employers.
Your chef has gone on holiday to Jamaica for two weeks. On the first morning of his holiday, he calls from Jamaica saying he is ill and that he has been medically advised that the illness will last for the rest of his holiday. He asks you to record his absence as sickness absence instead of holiday.
The European Court of Justice (ECJ) recently ruled in the case of Pereda v Madrid Movilidad SA that where an employee is sick when on annual leave, he has the right to take sick leave and reschedule annual leave. The ECJ held that: "Where that worker does not wish to take annual leave during a period of sick leave, annual leave must be granted to him for a different period."
Although the Pereda case involved an employee who had suffered a serious injury at work prior to taking a scheduled holiday, the judgment appears to apply more widely. The judgment is expressed in broad terms, which indicate that the position will be no different where sickness begins after a period of annual leave has started.
Therefore, there will be a legal obligation to postpone the chef's annual leave and allow him to record his absence as sickness absence.
There are some lawful ways in which employers can safeguard against potential abuse:
1. Stricter requirements for medical evidence
- Self-certification: The standard arrangement of self-certification for the first seven days of sickness is open to abuse if employees merely have to "call in sick" while on holiday.
- Employers could require proper medical evidence to be submitted from day one, if illness occurs during a holiday and the employee wishes to record the time as sickness absence. Many may be deterred from making such requests simply by the difficulties and costs of obtaining a doctor's certificate while abroad.
- Immediate medical examination: Employers can require employees to be examined by a company doctor on their first day back from their holiday. Although the examination itself may reveal relatively little - as by definition the returning employee is no longer "sick" - the prospect of having to undergo an examination may be a deterrent in itself.
2. Change sick pay terms
- Employers can still determine the pay employees should receive for sick leave during holiday and can change contractual sick pay terms to SSP where sickness occurs during holiday, including the first three unpaid "waiting days".
3. What holiday entitlement applies?
- This judgment only applies to statutory minimum holiday entitlement under the Working Time Regulations, so if the statutory entitlement has been used up in your current holiday year - 28 days including bank holidays for someone working five days a week - then any further holiday is a matter of additional contractual entitlement. Employers can adopt different rules for such additional, non-statutory holiday, including denying a right to postpone the holiday.
4. Disciplinary procedures
- Employers should amend disciplinary policies specifically to make falsely claiming illness on holiday an act of gross misconduct.
An employee denied his right to postpone statutory holiday can claim compensation in an employment tribunal according to what is "just and equitable". Although usually this will just be no more than the relevant amount of lost holiday pay, the cost and disruption of tribunal proceedings can be a more serious matter for an employer.
A dismissal for asserting rights to statutory holiday will be automatically unfair and the usual qualifying period of one year's service will not apply.
Similarly, other detrimental treatment for this reason is also unlawful and could result in constructive unfair dismissal if the employee resigns as a result of his treatment.