June 12

The complexities of annual leave and sickness absence.

As we approach the time of year when most employees may be hoping to take annual leave, it is worth considering the increasingly complex interaction between annual leave entitlement and long term sickness absence. Whilst straightforward, definitive answers would be much appreciated by employers and workers alike, the UK and EU case law in this area is becoming diverse and, regrettably, contradictory.
The European case of Stringer held that if a worker is absent due to ill health he or she will still accrue annual leave. That is a very clear message to employers. However, it is not without complication because it is unclear how much annual leave will accrue. Is it the full 5.6 weeks of paid leave a year (which UK workers enjoy and which equates to 28 days for a full time employee working 5 days a week) or, as per EU legislation, only a 4 week entitlement to paid leave?
Perhaps happily for employers, the courts confirmed that workers on long term sick leave are only entitled to carry over up to 4 weeks’ accrued but untaken holiday entitlement.
The law has further clarified that absent workers are entitled to this accrued but untaken leave regardless of whether or not the worker has asked to take holiday during that period of sick leave. Prior to this, it had been thought that in order to benefit the worker had to have formally requested the holiday – this is now not the case.
A further issue that has been before the courts is the question of when the accrued holiday can be taken by the worker. The options currently open to the employer are:
workers on long term sick leave must be entitled to take (and be paid for) any accrued annual leave during their time on sick leave – although the employer cannot insist that they do
workers absent for less than a year should be encouraged to take their outstanding annual leave on their return to work before the holiday year expires
·if there is insufficient time left in the leave year to enable them to take their accrued leave they should be allowed to carry this leave forward into the next leave year
an indefinite period of carry-over would become financially punitive for an employer but as yet there is no UK authority on how long a worker can carry over annual leave accrued during sickness absence – EU courts have ruled that 15 months after the end of the relevant leave year is reasonable and so it has been deemed safe to assume that sick workers should be allowed to carry over unused annual leave entitlement for a period substantially longer than the reference period in which the holiday accrued.
Employers may only pay workers in lieu of their annual leave entitlement on termination of their contract. It is important to remember that if a worker’s employment ends before having had the opportunity to take the annual leave entitlement due to sickness, the worker is entitled to a payment in lieu at the normal rate of pay for all the accrued leave including that which is carried over.

A further point to note is that if a worker has a prearranged period of annual leave and then falls sick, the worker is allowed to take their annual leave at a later date – even if this involves carrying it over to the following leave year.

However, an employer is entitled to ask for medical evidence of unfitness for work (over and above self-certification) if sickness occurs during a holiday. As it is an unusual situation, employers should make clear this applies regardless of how long the sickness lasts.

As is clearly demonstrated, this is a changeable area of employment law and until we secure further clarification from the national courts a degree of uncertainty will remain in certain areas. In the meantime, to minimise the risk of any challenge, employers need to be able to show that they have taken a reasonable and consistent approach to the various issues around sickness and annual leave set out in this note.

June 4

Employers already meeting the majority of flexible working requests ahead of the change to the law next year.

The law as it stands allows for parents of children aged 16 or under, or disabled children under the age of 18, to apply to their employer to work more flexibly if they have worked for 26 weeks continuously at the date that the application is made.

However, the right to request flexible working is to be made more accessible with the advent of Government proposals in 2014, which:

  • extend the right to request flexible working to all employees (not just those with parental responsibility for a child, or caring responsibilities for an adult);
  • replace the current ‘right to request’ procedure with a duty on employers to deal with requests in a reasonable manner, and within a ‘reasonable’ period of time;
  • create a statutory code of practice to give guidance on the meaning of ‘reasonable’ to employers; and
  • provide guidance to employers on how to prioritise conflicting requests that are received at the same time.

The 26-week qualifying period for employees to make a request for flexible working will be retained, as will the restriction that means that employees can make only one flexible working request in any 12-month period.

According to research carried out over the last six months by XpertHR, eight out of ten employers already agree to the majority of flexible working requests from employees – both with and without children. This is clearly well before the Government’s extension, thus demonstrating that employers are not only well prepared for the forthcoming legal change but also recognise the benefit in allowing their employees as much flexibility as possible within their working week. The most common flexible working arrangements were found to be part-time hours, flexitime and staggered hours but there are many kinds of flexible working, as follows:

  • part-time working
  • flexi-time – employees may be required to work within essential periods but outside ‘core times’ they often get flexibility in how they work their hours
  • job-sharing
  • working from home
  • term-time working
  • staggered hours – different start and finish times as a way of covering longer opening hours
  • annual hours – the hours an employee works over a whole year are calculated and usually split into ‘set shifts’ and ‘reserve shifts’ which are worked as the demand dictates
  • compressed working hours – employees work their total agreed hours over fewer working days
  • shift-working – widespread in industries which must run on a 24-hour cycle.

Flexible working is not without its issues, however, and the research also explored the difficulties faced by employers when trying to implement an effective flexible working policy – most commonly in the following areas:

  • complexity of scheduling working hours
  • difficulty arranging meetings
  • resentment from employees not working flexibly
  • internal communication difficulties
  • difficulty arranging training

However, these potential problems do not seem to have put employers off. The advantages to implementing such measures will be more motivated employees. Flexible working is not about creating a feel-good factor in the workplace: it’s about boosting the bottom line. Flexible working is part of good management practice. Although the statutory right to request flexible working has helped to popularise the idea, many businesses have adopted flexible working arrangements because it makes good business sense.