Sick leave can be a big headache for small businesses. Employment solicitors are frequently asked questions such as whether employees on sick leave should accrue statutory holiday, or whether they are entitled to take holidays while on sick leave. Here are a few guidelines which should point you in the right direction...

By law, an employer must give every worker (not just employees) 5.6 weeks (28 days for a 5 day week worker) of paid annual leave which includes bank holidays per leave year. For part-time workers, they are entitled to 5.6 weeks paid annual leave (pro rated to their working hours). For example, an employee working two days a week is entitled to 11 days leave a year. Employers can provide more holidays than the statutory minimum - but not less.

In terms of accruing annual leave during a period of sick leave, the European Court of Justice has decided that a worker on sick leave does accrue holiday entitlement. On a similar note, if a worker wants to take annual leave during a period of sick leave, the employer must allow this, and pay them holiday pay (though not sick pay) for that period.

So, what about annual leave which accrued during sick leave but was not taken? If the worker returns to work during the same leave year, and can take his full holiday entitlement during the leave year, then they are entitled to do so, subject to the employer’s notification requirements. However, if the worker returns to work and cannot take his full holiday entitlement during the leave year, then, as the Working Time Regulations currently stand, the worker is not entitled to carry over any outstanding statutory annual leave, as the regulations prevent annual leave being carried over.

However, this position has been recently questioned following a decision made by the European Court of Justice in the case of Pereda v Madrid Movilidad. The ECJ stated that a worker who is unable to, or decides they do not wish to take their annual leave during sick leave, has the right to take his holiday entitlement upon his return to work. However, it must be at a mutually convenient time for both the worker and employer - even if it means that the holiday entitlement is carried over into the next leave year.

A Leeds Employment Tribunal has recently followed Pereda notwithstanding the prohibition against ‘carry over’ in the UK Working Time Regulations.

Ultimately, employers must pay workers for all annual leave accrued but not taken, irrespective of the leave year in which it is accrued.

If you want to find out more or have any questions on Employment Law, then do not hesitate to contact Nicola Roe on 0115 9863636, she is a solicitor in the employment team at Richard Nelson Solicitors. Richard Nelson Solicitors is dedicated to providing advice of the highest quality to assist you in any employment issues you may have, in a way that you will understand. Employment disputes can be stressful, whether you are an employee with a problem at work or an employer who is defending a claim, so we aim to support you though the process and achieve the best possible outcome as quickly and cost effectively as possible.