Management Clinic: Illness on leave

The law regarding claims of sickness during statutory annual leave has recently been modified. The European Court of Justice has ruled that a period of illness while on holiday does not count towards the entitlement to annual leave and, as such, any employee who is ill during their holiday can request replacement leave to cover the period of ill health. In the event of this request, you cannot refuse to allow them to convert this time. If you do not believe that this was genuine sickness then you can challenge it in exactly the same way as under normal circumstances.

There are a few factors that you can consider when dealing with the request. You should give reasonable consideration to the fact that your employee did not notify you of a period of sickness during their annual leave. For example, if they were in a remote location and struggled to find a way of communicating with you, it is understandable that they could not contact the office.

Even under less extreme circumstances, though, it would not generally be considered necessary for your employee to contact the office during this time; it would be acceptable for them to inform you of the sickness period upon their return. You would expect them to tell you immediately upon their return to work and not wait a few days before saying anything. You should update your holiday and sickness policies to set out what steps you expect your employees to take in these circumstances. Make sure that you monitor this to ensure it is not abused.

While your employees are in most cases able to request that the time lost through illness be given back to them, they are only able to recover the period of time during which they were actually ill, so the remaining period of holiday will stay as annual leave. Make sure your staff are aware that if they will want to convert a period of holiday into sick leave then they will need to comply with the company sickness policy as far as is practicable. If the period of ill health will last beyond seven days then they will need to provide medical evidence to recover this time as sickness, although in this case they would be able to self-certify themselves for this three-day period.

If holiday is converted to sick leave then your employees will only be paid in accordance with your company's sick pay rules and they need to understand that this could reduce their income over this time, particularly if you only pay SSP and do not pay for the waiting days. If you have any bonus schemes that are calculated by considering sickness absence then this converted period of leave will be counted. Similarly, if targets were adjusted to allow for a period of annual leave then they will have to be recalculated to take into account that the leave period is shorter.

You might want to look at your absence management procedures in relation to periods of sickness during holiday leave. Putting in place a policy stating that periods of sickness cannot be covered with holiday may make it easier for you to manage absence.

Source: PB – June 2010