Sick Pay Ruling makes employers feel queasy

The European Court of Justice has recently decided that employees who are on sick leave will still accrue the right to paid holiday leave. This applies whether they are on long term or short term sick leave. In the case they considered, an employee was injured some weeks before a pre-booked holiday. He was allowed to cancel the annual leave he had booked, and take the time off as sickness absence. That may not seem too unreasonable in the circumstances. The wider ramifications of the decision have caused a lot of concern with employers.

Clearly, most employers would not expect someone who has a couple of days off with a minor ailment to forfeit annual leave.

However, if an employee is off work for many months, often on reduced pay, employers may not appreciate that they are entitled to accrue annual leave at full pay rates.

This decision means that employees can, in effect choose whether to be sick on their own time, or on company time.

For example, if an employee spends 2 days of his summer holiday in bed with gastroenteritis, he can simply demand on his return to work that the employer treats those 2 days as sick leave rather than annual leave. The employee is then free to take the two days as annual leave some other time.

Many employers will find it hard to sort out the genuinely ill from malingerers. How will an employee provide evidence of sickness abroad?

We recommend that employers review their sick leave policies as a result of this decision.

Practically, Statutory Sick Pay (the legal minimum) makes it legal for employers to pay employees at a reduced rate for days off sick. Therefore, the differing rates of pay between Statutory Sick Pay and paid annual leave may mean that many employees choose to share the risk of illness with their employers, as before, rather than lose a day's pay. Not all employers adopt SSP however, and many schemes are more generous.

So, whilst many commentators are up in arms about this decision, the reality may be that this is a legal right which only certain groups of employees will take up.