What does it mean for businesses?
A worker who becomes unfit for work during a period of annual leave is entitled subsequently to claim that annual leave back.
The court ruled that as the purpose of holiday entitlement is to enable the worker to rest, the purpose of sick leave entitlement is to recover from an illness, so the two are not interchangeable.
An earlier ruling found that employees could rearrange their annual leave if they knew they would be ill so that the two would not overlap – this in itself could cause staffing nightmares for business owners.
Perhaps most worrying for employers, a worker is entitled to take paid annual leave at a later point in time, regardless of when the incapacity for work arose. This means that employees could claim back annual leave at a time that suits them – even in the next leave year. Though the case that led to the ruling originated from Spain, the outcome is now legally binding across the EU, including the UK.
The Forum believes that this ruling is patently anti-business. While the decision came about due to a tribunal between Spanish workers and large department stores, the ruling does not take into account the impact on small private businesses and only time will tell how it will affect businesses like yours. The ruling is part of the EU Working Time Directive, which includes the clause on the 48-hour working week.
Although the UK government opted out of this clause, they are not able to simply ‘opt out' of holiday rights, though the Coalition has said it will ‘resist implementing the court's judgments'.
Unless this happens, or case law overrules it, employees will be able claim back holidays if they can prove they are sick while on holiday. In the meantime, businesses can only hope that the honesty of employees and the recently introduced costs of bringing a tribunal claim will discourage employees from taking advantage of employers and testing the law through the courts.
What can businesses do?
It is a good idea to make sure you have the right absence management policies and monitoring in place to deal with employees who persistently take sick leave.
An employee trying to claim sickness whilst on holiday must still follow your company sickness policy, meaning that they can self-certificate if ill for less than seven days, but must provide a medical certificate if over.
The employee must also call employer each day (as specified in employment contract) even if out of the country.
If you don't have employment contracts in place or they do not contain anything relating to sickness and absence, call us now on 0845 130 1722.
Of course if claiming to be ill, the employee will be entitled to Statutory Sick Pay after three waiting days unless enhanced sick pay is payable or holiday pay is claimed.
Members can download an absence management template (login required) or call the helpline now on 0845 130 1722 for further advice with absence management.
A ruling by the European Court of Justice means that employees who are sick during their annual leave will be entitled to take corresponding paid leave at a later date, leaving business owners potentially understaffed and out of pocket.