Employee holiday and sickness; your questions answered

Sickness before a scheduled holiday

Where your employee becomes unexpectedly ill before a previously agreed period of holiday, they are entitled to reschedule that scheduled annual leave for a later date.

In the event that their sickness absence continues through to the end of the relevant leave year, an employee is entitled to carry over their leave to the following leave year.

Sickness during a scheduled holiday

If an employee is away from work on a period of previously agreed annual leave and becomes unexpectedly sick during that leave, they are entitled to reschedule any holiday for the time that they were sick to a later date including in the following leave year.

Can an employee ask to use some of their holiday entitlement when off sick?

In practice, employees often seek to use some of their annual leave entitlement when off on long term sickness absence. This is usually in order to benefit from holiday pay, which should be at the rate of their average basic salary.

The Working Time Regulations 1998, sets out maximum working hours, rest periods and holiday entitlement for employees, workers and apprentices.

These Regulations do not explicitly prohibit or permit an employee using their holiday entitlement during periods of sickness absence. Nonetheless, case law has determined that employees are entitled to nominate a period of sick leave as holiday.

It’s important to note that whilst an employee can choose to take holiday during sickness absence, their employer cannot force them to do so.

What if an employee is sick during a time I usually shut down my business?

Some businesses nominate specific periods, such as the week of Christmas, to close and as such may require their employees to take holiday for the whole of this period which they are entitled to do.

Nevertheless, if an employee is sick during this period the employee remains entitled to take their annual leave at a later date, unless they choose not to, despite the general closure of the business.

What about sickness during bank holidays?

Some employers include the usual bank holidays in their employee’s contractual minimum annual leave entitlement. In this instance, if an employee is sick on a bank holiday, they are entitled to take the annual leave ‘lost’ at a later date.

In contrast, some employers give employees an additional contractual entitlement to bank holidays over and above their minimum annual leave entitlement. In these circumstances, if an employee falls sick on a bank holiday, whether they are entitled to a paid day off at a later date depends on the terms of their contract.

How much holiday can be carried over from year to year?

The Working Time Regulations 1998 (as amended), establish generally that workers are entitled to 4 weeks basic annual leave per leave year (section 13) and 1.6 weeks of additional annual leave per leave year (section 13A) equating to a minimum holiday entitlement of 5.6 weeks per holiday year.

Generally speaking, if you don’t use your minimum holiday entitlement in the relevant leave year, you lose it. There are however, specific exceptions to the ‘use it or lose it rule’ including:

• Sickness

If a worker has been unable to take some or all of their basic holiday entitlement for that leave year they can carry forward the remainder which must be taken within a period of 18 months starting from the end of the relevant leave year from which the entitlement arose.

• Failure to recognise the right

Where an employer has failed to recognise a worker’s right to basic holiday leave or holiday pay, the holiday may be carried over until the end of the first full holiday year in which the employer recognises the right.

• Failure to inform

If an employer fails to let workers know that if they don’t ‘use’ their basic holiday by the end of the leave year they’ll ‘lose it’, then that worker can carry over the holiday until the end of the first full holiday year in which the employer complies with this obligation.

• Failure to give or encourage

If an employer has not provided a worker with reasonable opportunity or encouragement to take their basic holiday entitlement, a worker can carry over any untaken basic holiday until the end of the first full holiday year in which the employer complies with this obligation.

• By Agreement

Where an employer has agreed that employees can carry over their additional holiday entitlement they can do so into the following holiday year.

• Covid-19 Pandemic

As a result of The Working Time (Coronavirus) (Amendment) Regulations 2020, if it was not reasonably practicable for workers to take their basic holiday entitlement due to coronavirus, they are entitled to carry forward their lost holiday into the next 2 holiday years. There are a number of tests that help determine what suffices as reasonably practicable.

How can Ellis Jones help?

If you have employment concerns, or would like a free health check of your workplace policies and contracts, contact our Employment Law Team on 01202 525333 or by email at employment@ellisjones.co.uk.