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There has been considerable activity through the legal system concerning holiday pay for long term sick. The current situation may be summarised as follows:
- Statutory holiday (that is the original four weeks) continues to accrue during ALL sick leave, regardless of the length of the absence. However the additional 8 days and other contractual entitlement need not be paid.
- Employees on sick leave are entitled to come off sick leave - take some of their paid holiday entitlement - and then return to sick leave. However they must give notice of their intent to take their holidays - the rules remain the same in this respect as for their colleagues who are at work.
- If the employee does NOT take their holiday entitlement during the relevant holiday year then they will lose it under the rules set out in the Working Time Regulations (WTR). However the European Court of Justice (ECJ) has stated that carry over must be allowed where a worker has been prevented from taking holiday leave due to being on another form of leave. Therefore the situation is unclear in this respect.
- If an employee on sick leave leaves of their own volition or are dismissed then they are entitled to be paid for any accrued and outstanding holidays.
- If an employee is denied the right to take their holiday entitlement then they may make a claim to Tribunal under the WTR or Employment Rights Act (ERA)
- Employers may wish employees on long term sick take their holidays during an annual shut down but it is unclear as to whether or not they can insist upon this under the WTR.
- The amount of holiday pay to be paid employees on long term sick is unclear as the ECJ refers to "the worker's normal remuneration". If it is their normal rate of pay should it include any pay increases which have taken place during their absence.
It is unfortunate that some areas remain unclear and only time will tell.
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