Annual leave entitlements for employees on long term sick leave
Since August 1 2015 employees are entitled to accrue annual leave when they are on long term sick leave.
This means that employees on certified sick leave are able to carry over their holiday entitlements for a period of 15 months after the year in which they were entitled to take the annual leave. It applies to employees who were not able to take their holidays because they were on sick leave.
This is a significant change in employment law – prior to 1 August, if a person was on sick leave for over a year they lost their holiday entitlement for the year they were out of work.
It will have a significant impact on employers, particularly where an employee does not return to work after their sick leave. On termination of their employment, the employee is entitled to payment in lieu of untaken accrued annual leave.
We would advise employers to review all contracts of employment and employee handbooks to ensure that they are in line with the revised law. The employer should clearly state that the accrual of annual leave applies to statutory leave entitlements only.
Employers should also undertake an audit of staff who are on long term sick leave and ensure their annual leave entitlements are calculated in line with the revised legislation.