Can a worker be sick and on holiday at the same time?

To recap, the Working Time Regulations which came into force in 1998 to implement the European Working Time Directive provide for workers (a term which includes employees as well as some other individuals who work for a particular employer) to be entitled to 5.6 weeks of paid annual leave. Of the 5.6 weeks, 4 weeks must be taken in the year in which they accrue and the balance of 1.6 weeks can be carried forward to the next holiday year. Workers can give notice of when they want to take leave but the employer can give a counter notice objecting to leave being taken when requested. Employers can also request workers to take leave at a certain time (for example during an annual closure). Finally, the Regulations provide that an employer cannot make a payment to a worker in lieu of the annual leave entitlement except on termination of employment.

So what happens if a worker has a pre-booked holiday and happens to fall ill before or during that period? The historical answer has been that, unless the employer decided otherwise, it was too bad for the worker. Now the answer is different. If a worker is off sick, he or she is not taking a “break from work” under the annual leave provision so, subject to having complied with the employer’s requirements in terms of notification of absence, the worker should not lose holiday entitlement for time spent being off sick.

If a worker is off sick towards the end of the holiday year or is off sick long term, he or she may not be able to take his or her holiday entitlement in the year it accrued. This is not necessarily a problem if the accrued holiday entitlement is the excess over the basic 4 weeks. In that case, the excess can be carried forward, at least to the next holiday year.

If the accrued holiday entitlement includes some or all of the basic 4 weeks, then there is a conflict between the wording of the Regulations which prohibit carrying over or paying in lieu (except when employment terminates) and the Directive as interpreted by the European Court of Justice. The European Court of Justice’s view is that, in such circumstances, the employer must allow the worker to carry over the accrued holiday entitlement. For private sector employers, it is generally not necessary to comply with European Directives and they only need to comply with national legislation. So, in the case of holiday entitlement during sickness absence, they could take a hard stance and refuse to allow workers to carry over holidays not taken because of sickness or injury.

However, it is possible for UK tribunals and courts to effectively modify the wording of UK legislation when they interpret it so that it accurately reflects the intention of the European Directive from which it is derived. This has now happened in an Employment Tribunal decision, which ruled that the Regulations should be read as allowing the carry over of holiday entitlement when the worker has not been able to take his/her full allowance during a holiday year due to sickness. This decision is not binding on other tribunals but it is probably only a matter of time before a case reaches the higher levels of appeal and there is a binding precedent.

Clearly, this could have far reaching implications for employers particularly when an individual is on long term sickness absence perhaps receiving payments under a Permanent Health Insurance scheme. In such circumstances, there is another strand in case law which may be of help to employers. This is a ruling that workers who are off sick long term can, during that period take, if they wish, periods of paid annual leave. 

So it seems that the answer to the question of whether someone can be on holiday leave whilst off sick will depend on whether the holiday is at the request of the employer or the worker. The overlap between holiday entitlement and sickness absence is now a complex issue and employers need to review their terms and conditions of employment to ensure that they are not infringing current rights whilst putting in place safeguards to minimise the risk of abuse.

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