Employees on long-term sick are automatically entitled to carry over outstanding holiday

29 July 2012
Employees on long-term sick are automatically entitled to carry over outstanding holiday

A recent court decision has confirmed that employers should automatically carry over annual leave that an employee has been unable to take due to long-term sickness, without staff needing to request this.

The upshot is likely to be expensive for employers. Staff returning from long-term sickness may have sizeable chunks of annual leave to be taken in the year that they return. Alternatively if staff leave or are dismissed, this annual leave will need to be paid to the employee in their final salary, which can be also costly.

In response to the case, you may need to update your organisation's sickness absence and annual leave policies, to state that annual leave not taken due to sickness absence will be automatically carried forward to the following year. You may restrict this and state that automatic carry over does not apply to annual leave entitlement beyond the statutory minimum. Either way, you will need to ensure that your staff contracts are consistent with your policy. If this requires a change to your terms and conditions, make sure any changes are agreed with your staff collectively. If you are unsure, take legal advice first or speak with Acas on 08457 47 47 47.

You may also wish to give staff on long-term sick the option to request and be paid for annual leave while off sick as a way to spread the cost and the impact of accumulating annual leave; however this cannot be forced upon the employee unilaterally.

More generally, the court's decision may provide grounds for organisations to collectively negotiate less generous company sick pay with staff, as a way to offset the cost of carried over annual leave. A tighter or more robust absence management procedure may also be beneficial to minimise any unnecessary burden.

For more information on absence management, see our absence section on HRBird. 

Source: People Management

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