General Information
Home | About Liquid HR | What is Liquid HR? | Join us Now | Terms of Use
Pricing | Latest News | In the Press | Contact us
What is Liquid HR?
Overview | Individual Solutions | Total Solutions
Employment Law
Employment Law - What we offer | Employment Law - Why join | Employment Law - Useful Resources
Health and Safety
Health and Safety - What we offer | Health and Safety - Why join | Health and Safety - Useful Resources
HR Support
HR Support - What we offer | HR Support - Why join | HR Support - Useful Resources
Paid Holiday & Long Term Sickness
14th October 2009
The House of Lords recently ruled that staff accrue paid holiday while on sick leave...
(The case of Stringer V HMRC refers). Workers who are denied holiday pay while on sick leave can claim to an employment tribunal for unauthorised deduction from wages, with a worst case scenario of claims for up to six years’ of holiday pay.
Action for employers
- The House of Lords ruling applies to the statutory element of holiday entitlement, not contractual leave in excess of this amount. A decision on how to treat accrued annual leave for employees currently absent on sick leave where the absence has, or is likely to, run beyond the end of your holiday year will need to be taken.
- Holiday accrual and payment of untaken holiday must potentially be incorporated into any dismissal process involving employees on long term sick leave.
- Where an employer has Permanent Health Insurance (PHI) provision, they should check the ramifications of the “Stringer” case with the provider, if advice has not already been provided.
- A full review of sickness and holiday policies should be undertaken. Contracts of Employment and Employee Handbooks may also need updating.
- Contractual/policy clauses can be amended to state that during long term sickness absence, the statutory minimum of 28 days’ holiday will accrue, rather than any additional contractual entitlement.
- Employers should introduce/use long term absence management procedures to moderate the length of time employees are absent. Allowing absence to continue uncontrolled could see workers accruing substantial amounts of holiday entitlement or holiday pay.
Frequently Asked Questions
Q. Is there a statutory definition of long term sickness?
No. The normal convention is that absence exceeding four weeks is considered long term.
Q. What happens if an employee returns from long term sickness within the current leave year?
They will be entitled to take the remainder of their holiday entitlement for that year as normal.
Q. What if someone goes off sick during their authorised holidays?
This is a grey area. If you already convert holiday to sickness this should continue. If you do not already do this, you should wait to see how case law develops before conceding anything additional.
Q. What happens if an employee’s sickness bridges two or more holiday years?
The employee potentially accrues statutory holiday entitlement/pay for each.
Q. Should I pay an employee outstanding holiday pay while they are still off sick?
The House of Lords judgement effectively permits this; even though they are not necessarily leaving your employment.
Q. I have an employee who has been sick for a considerable time; does this mean I have to give them holiday for all this time?
Potentially, yes. This judgement means that keeping people who are long term sick “on the books” is no longer cost neutral. You may need to introduce a more rigorous sickness management policy.
Q. Should I pay an employee statutory sick pay and holiday pay at the same time?
Yes, the judgement permits this. The holiday pay should be paid inclusive of any SS entitlement.
Q. We offer company sick pay through an insurance based scheme; are we affected?
Yes. However, before you pay holidays to a sick employee, you should check with your insurer as they may require you to deal with matters in a particular way.
Q. If we end up paying a full year’s salary through a company sick pay scheme, surely we will not have to pay holiday as well?
Unfortunately, you do. This judgement potentially means you would pay both.
Q. I have an employee who has been long term sick on several occasions over a number of years. What are the implications?
Theoretically, they may be able to claim for up to six years but you should seek further guidance from your HR Department.
Q. We have no provision for “carry forward” of holidays in our terms and conditions. If an employee who is on a period of long term sickness absence did not ask to take holidays in that year and it is now a later leave year, do we have to pay them?
This is a grey area but you may not have to pay. Please seek further guidance from your HR Department.
Q. If we allow an employee to take outstanding holiday on their return from long term sickness, by when must it be taken?
You should insist that it is taken in the current leave year. It is ultimately up to the employee to ensure that they do take the holiday.
Q How should I deal with an employee who is absent due to a serious illness?
Encouraging an employee who is seriously ill to take annual leave may not be appropriate and could be considered insensitive. However, an employee may welcome the opportunity to receive payment in the event that their sick pay has been exhausted. Employers should therefore tailor their approach according to the circumstances and current sick pay position.
For more information on what liquid hr can do to help your business, click here