How Employers can avoid becoming sick of holiday rights

We are now well and truly into the holiday season. Workplaces up and down the country are emptier than usual, “out of office” becomes regular reply to your emails, and voicemails inform you that the person that you are trying to call will not be back for another two weeks.

Ever since the introduction of the Working Time Regulations in 1998 the issue of annual leave has become an increasingly difficult one for employers to deal with. Case law from both the EU and the UK has developed in relation to this issue particularly in relation to sick leave and annual leave and the following principles have been established:-

a)      Employees who are off sick can roll over their holiday entitlement into the next leave year.

b)      Employees can choose to take their holiday entitlement while they are on sick leave.

c)       Employees who become ill while on holiday can re-take their annual leave at another time.

d)      An employee who is off sick for the whole of an annual leave year does not have to specifically request that their annual leave entitlement is rolled over to the next leave year.

As well as the legal headaches that employers encounter there are also the practical problems. How do they ensure that the business is still able to operate properly while their employees are on leave? What is the fairest leave request system to have in place? What systems need to be in place to deal with the issues relating to sickness and holiday leave?

Despite bodies such as the CBI and Institute of Directors complaining about the difficulties that employers face when dealing with the issue of annual leave it is unlikely that anything is going to be done soon by the government to change this position due to the fact that the law relating to annual leave stems from either EU legislation or European case law. Employers therefore have to consider what they can do to try and minimise the effects of these cases. Here are a few suggestions on how to minimise these effects:-

1)      Have a clear Holiday Policy and Procedure – A clear holiday policy should state how much time off can be taken at one time. It should also state when requests should be made by and how they will be dealt with. The policy should also make it clear if there are any shutdown periods (e.g. Christmas) when leave should be taken.

2)      Plan for Holiday Absences – There are likely to be times of year such as during the school holidays when employees are more likely to want to take time off. Employers should consider what their business needs are and plan accordingly, for example; by setting limits on how many employees within a team or the business as a whole can take time off at any one time.

3)     Consider how to deal with multiple requests for time off during popular periods such as Christmas - Should it be on a “first come first served basis” or should there be some form of ballot? This does have to be  considered carefully, I remember when a firm that I worked at said that requests for time off at Christmas would be dealt with on a first come, first served basis and this resulted in a queue of employees outside the HR office on 2 January ready to hand in the leave requests for Christmas of that year almost 12 months in advance!

4)      Have a clear sickness/capability procedure – As stated above, employees who are off sick do continue to have rights in respect of annual leave. Dealing with sickness absence in a properly can prevent employees unnecessarily accruing holiday entitlement. It is also the case now that in light of recent case law employers should also consider what procedures they should have in place for employees who became ill while on holiday and who may want to retake their leave at a later time.

5)     If in doubt speak to a solicitor – Well I would say that wouldn’t I! The reality is that the earlier that you seek advice about any potential problems the more likely it is that you will avoid costly litigation in the future saving a lot of money in the long run. (We also have  a special offer to either update or draft yourholiday procedure for £75 plus VAT for details of this click here)

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Holiday ruling shows that red tape is hard to cut

The European Court of Justice ruled yesterday that employees who fall ill while on annual leave can retake their leave at a later date. This ruling has been expected by employment lawyers for some time and the government is to make changes to the Working Time Regulations to both comply with the ruling and also deal with the difficult issue of how annual leave can be carried over by employees who are unable to take their entitlement due to sickness. The consequences of this ruling are however potentially extremely costly for employers and in particular small businesses.

A few years ago I went on a holiday to Egypt. We had a wonderful time enjoying the hot weather, spending time relaxing on the beach or by the pool, seeing the sights and going diving. The only slight downside to this trip away was that, to put it delicately, I had some tummy troubles for the first few days. I was still able to enjoy myself but I had to ensure that I was not too far away from the nearest WC.

Arguably the above scenario is not uncommon for many holidaymakers; however, these symptoms potentially could be classed as sickness and that if this happened again I could claim that I should be entitled to retake my annual leave at another time.

You could probably argue that my upset stomach was partially self inflicted in that I went to Egypt where the heat combined with the change in food/water meant that it was much more likely that I would pick up some form of bug. So in the future could employers decide that under their contracts of employment employees should be required to avoid certain destinations or types of holiday e.g. skiing, snowboarding or diving?

It also raises the question as to what happens if the employer only pays SSP and the employee declares that they they were off sick and want to re-take their annual leave at another time. Can the employer recoup the holiday monies that may have already been paid to the employee? Also how much time can elapse between the employee being ill while on leave before they tell their employer. Should they tell the employer on the day that they are sick as they are often required to do so under their contract of employment or can they wait until their return from leave? 

What is probably not in question is that this ruling means that a further burden will be placed on employers. The costs of complying with this obligation will probably outweigh the savings for employers that may have been made by the increasing of the length of service required to make a claim of unfair dismissal and the proposed changes contained within the Enterprise and Regulatory Reform Bill.

I am not aware of any ministers criticising the ruling and the resulting consequences for employers. There have been no promises to try and change the law at European level, probably because in the EU it is easier for laws to be created than for them to be repealed. What this ruling shows is that the government’s promise to reduce red tape for employers is perhaps one that they will struggle to keep.