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Wake-up call – Separating sick leave and holidays

16 December 2011
Wake-up call – Separating sick leave and holidays

If an employee's annual leave coincides with a period of ill health, are they within their rights to claim the holiday later? Legal expert Katee Dias explains

If an employee is off work due to long-term sickness but has pre-booked a period of annual leave that coincides with this, does their absence count as sick leave or holiday?

The European case of Pereda v Madrid Movilidad SA (2008) was the first to consider this issue. Pereda was incapacitated following an accident at work, two weeks before his pre-allocated holiday. He remained off sick during the pre-arranged period of holiday so he asked his employer for another period of annual leave instead. His employer refused.

Pereda disputed this and went on to bring a successful claim against his employer. The European Court of Justice held that if a worker is on sick leave during a period of pre-arranged annual leave, they must have the option to take their holiday at a later time.

The UK case of Shah v First West Yorkshire Limited (2009) confirmed this approach. Shah was off work due to sickness for three months, during which time he had pre-arranged holiday. He asked his employer whether he could claim back the holiday that he had booked but they refused. He therefore brought an employment tribunal claim.

The tribunal held that he should be allowed to take his holiday at a different time, even though this meant that he had to carry over some of his holiday entitlement from the current holiday year to the next holiday year. It should be noted that although tribunal decisions are not binding authorities in English law, they are persuasive and therefore it is probable that this position will remain when a higher court rules on this point.

As the above cases show, where an employee is unable to take their pre-booked annual leave because they are off sick, they should be allowed to designate an alternative holiday period.

Some useful reminders about holiday and sick leave:

â- Where the employee's sickness absence coincides with pre-booked holiday, the employee should be allowed to defer their annual leave to an alternative time, even if it means carrying forward their holiday entitlement into the next holiday year.

â- During annual leave, an employee should receive their full salary in the usual way, whereas during a period of sick leave, they should receive sick pay. Many employers pay only statutory sick pay, although some employers may have a more generous sick pay scheme in place.

â- Statutory sick pay is currently £81.60 per week. The first three days of sickness absence are unpaid under the SSP regime and statutory sick pay is payable for the first 28 weeks of sickness absence only.

â- If an employee is absent from work on sick leave for an entire holiday year, their holiday entitlement still accrues.

â- It is possible for an employee who is off work because of long-term sickness to take holiday during the period of sick leave. This may be advantageous for the employee as it often results in a higher rate of pay than their sick pay.

â- Watch out for changes to the Working Time Regulations 1998 (the key piece of legislation governing holiday rights) as the Government is currently contemplating whether to make amendments to it.

An aggrieved employee who has not been able to re-designate a period of annual leave that has been missed due to sickness may bring a claim against their employer in the employment tribunal.

Further, if an employee is dismissed because they have asserted their holiday rights, their dismissal will be considered automatically unfair and so the employer may find themselves having to pay significant compensation to the employee for this.

Katee Dias is a solicitor at Goodman Derrickkdias@gdlaw.co.uk

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