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Holiday sick leave ruling could be open to ‘abuse’

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A ruling by the European Court of Justice (ECJ) has given employees the right to ask to claim back leave if it has been affected by illness.

The case centred on a Madrid council worker who suffered an injury just before he was due to go on holiday. His employers refused his request to move his leave period because of the injury. The worker, Francesco Pereda, then initiated a legal action.

Hearing the case, the ECJ ruled that employees have the right to ask for leave to be reallocated if it has been affected by sickness or injury, and that the employee should have been permitted to take his leave at a different time and that, if necessary, it should be carried forward into the next holiday year.

The judgement is a reinterpretation of the Working Time Directive which covers all UK workers too.

Katja Hall, director of HR policy at the CBI, expressed possible employer concerns at the decision.

Ms Hall said: “Many firms already take a common sense and sympathetic approach. But allowing employees to re-classify their holiday as sick leave opens the door to abuse.”

The ruling echoes a judgment handed down by the House of Lords in the case of a group of Customs workers, which stipulated that employees can accumulate holiday entitlements while on long-term sick leave.

Making its judgment, the ECJ said that if a “worker does not wish to take annual leave during a period of sick leave, annual leave must be granted to him for a different period”.

The wording of the ruling does not define the time at which an illness can affect the taking of a holiday, or when employees must report the illness to their employers to qualify for a rearrangement of their leave, or what proof would be required.

In the instance of Mr Pereda, the injury occurred after he had booked his holiday but before he had started his leave period.

Some lawyers believe that the ruling does not necessarily prevent workers who have already begun their holidays from asking to reallocate leave in the event of illness or injury.

Under the current rules on sick leave, employees can self-certify sickness for up to seven days. After that, they must have a doctor’s note in order to continue on sick leave.

Owen Warnock, a partner at law firm Eversheds, said: “Many employers take the view that if an employee is sick while on holiday, that is just bad luck for them. The European court has now said that this is not allowed by the Working Time Directive.

“The danger of abuse is clear: an employee could increase his or her holiday entitlement by ensuring that in most years they alleged they were sick while on holiday. It may only be the occasional ‘bad penny’ who does this, but the resentment that it would create with colleagues should not be underestimated.”

However, Mr Warnock added that until “the European or UK courts say otherwise, our view is that employers are entitled to require workers to produce convincing evidence of their illness while on holiday and that it would have rendered them unfit for work before allowing workers to ‘reallocate’ holidays”.

Sophie Kummer, of the Federation of Small Businesses, said: “This is something that could be highly detrimental to small businesses, especially with the extra administration costs and so on. We’ll see how it plays out in the UK, but it could be a serious business for our members.”

Ben Wilmott, senior public policy adviser at the Chartered Institute of Personnel and Development (CIPD), described the ruling as “completely divorced from the real world”.

Mr Wilmott argued that it is well-established that employers should take on some of the risk of employees being sick on work time, but that it is basic common sense that employees should in turn be willing to accept the risk that they may be sick on their holidays.

He continued: “The sad fact is that nonsensical rulings like this could force good employers to review their relatively generous occupational sick pay schemes, and consider opting for Statutory Sick Pay schemes instead.”

The CIPD said that, in practical terms, employers should at the very least clarify their absence management policies so that employees understand they will need to phone their line manager daily if they are sick while on holiday to confirm that they are still sick and not fit for work.