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Sick Pay and Holiday - the latest twist

Ever since the Working Time Regulations came into effect in 1998, there has been debate as to whether an employee who is on long term sick leave continues to accrue and should be able to take annual leave.

This becomes significant either where an employee who has exhausted their sick pay entitlement seeks to take paid annual leave during a period of illness, or where an employee returns from a period of sick leave and immediately asks to take their 4 week* holiday entitlement.

Cases on the subject have been through all levels of the employment tribunal, higher courts and European Courts. Having looked as though the law was firmly on the side of the employer, with no right to take or accrue leave being found, the European Courts of Justice reversed the view. It said that an employee will continue to accrue leave and that they can elect to take a period of absence as annual leave, providing they require the appropriate notice obligations.

This was a somewhat surprising result, but one that will no doubt be welcomed by employees.

*holiday entitlement under the Working Time Regulations increased to 4.8 weeks in April 2008 and is set to increase further to 5.6 weeks in October 2010.