Employers need to adjust to Lords ruling on holiday entitlement
07 July 2009
Businesses may want to reconsider some of their employment policies following a ruling by the House of Lords that staff are entitled to accrue holiday entitlement while off work sick.
An employee who resigns or is made redundant while off sick will be entitled to payment in lieu of holidays. This must be in addition to any redundancy payment. Employees will be able to take the case to an employment tribunal if the holiday entitlement is withheld.
The ruling follows a long running case involving staff at Her Majesty’s Revenue and Customs. The Court of Appeal ruled that the staff were not entitled to accrue holiday entitlement while off sick but in January, the European Court of Justice said that decision was wrong.
Now the House of Lords has also ruled in favour of the employees.
However, it only applies to statutory minimum holiday pay. Firms may be able to be more restrictive with contractual holiday entitlement which exceeds the statutory minimum.
Some firms may decide to try to find ways to make it easier for staff to return to work; others may feel obliged to move quicker than in the past to dismiss staff on long term sick leave. Whatever approach firms take they need tread carefully to avoid the possibility of a costly tribunal claim.
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