Managing Overlapping Annual and Sick Leave

You took a week off and made exciting plans. You'll take a trip to the beach, finally open that book you've been meaning to read, make a long-overdue visit to your parents, and recharge your batteries. And then it happens - on the first day of your vacation you get sick. What could be worse?

What if you couldn't cancel your annual vacation?

That would be the icing on the cake.

The last thing you want is to get sick during your annual leave, but it does happen. If you, as a manager, know how to handle this delicate situation, you will save yourself a headache when it does happen. We look at what to do when sick leave overlaps with annual leave and what the law says about this.

What should you do if employees get sick while on annual leave?

Simply put, if someone gets sick while on annual leave, you need to give them the option to cancel their annual leave, record it as sickness and take their holiday at a later date. That's only fair, because if the employee doesn't go on vacation at all, he or she can also take sick leave.

Forcing someone to use their precious vacation entitlement when they can't do anything with it is not only mean, but probably bad for your company. Time off is important because it gives employees the opportunity to relax, switch off and focus on the things they enjoy.

If their long-awaited annual vacation is ruined by an upset stomach or the flu, they won't benefit from it. Depriving them of the opportunity to take their annual leave at a different time makes them more likely to suffer long-term burnout or lack of motivation and be less productive overall.

What does the law say on this subject?

These considerations are also supported by the law. The European Court of Justice ruled back in 2012 that "an employee is entitled to paid annual leave coinciding with subsequent sick leave."

He reasoned that there is a fundamental difference between the purpose of sick leave and annual leave. Vacations are intended to give people the opportunity to rest and relax as they wish. Sick leave, on the other hand, is specifically designed to help you recover during a period of illness.

The ECJ ruling in the Stringer v HMRC case even included references to how it relates to the existing Working Time Regulations 1998. In short: employees who are on sick leave should still be able to claim statutory annual leave entitlement. Vacation entitlements that are canceled due to illness during a vacation year can be carried over to the next vacation year.

What are the consequences if employees take their annual leave due to illness?

Although the law allows this, it is not necessarily easy for a company to deal with. There are a number of problems with allowing employees to take their annual leave while on sick leave. First, it could impact visibility into overall sick leave across the company when you look back over the year.

Cynically, you can also imagine a situation where someone tries to apply for leave at short notice, is denied, but then takes the sick day instead, only to later convert it into a day of annual leave.

Your position on taking statutory leave during a sick leave should be made clear in your sick leave policy to eliminate any doubt about what your team can and cannot do.

Can employees take annual leave during a long-term illness?

The other side of the overlap between annual leave and sick leave is the question of whether employees can intentionally take paid leave while on long-term sick leave.

A long-term illness usually occurs when you are on sick leave for more than four weeks. It can be caused by a physical or mental illness and usually requires a medical certificate certifying that you are unable to work. (The self-certification should only be valid for absences of up to seven days, including holidays and weekends).

During a long-term illness, some employees want to use their holiday pay entitlement to top up statutory sick pay so that they continue to receive their full salary during their sick leave. (Your contractual sick pay may not be equivalent to full-time salary unless your company has a generous sick pay policy).

The short answer is that they are not legally prevented from doing so and, as previously mentioned, are entitled to a transfer of unused sick pay.

How important is a break?

There's a reason why it's a legal requirement to give people the opportunity to recover by taking time off from work (that isn't ruined by illness!). It is extremely important for well-being. Not only does taking time off help people relax and recharge before returning to productivity, it also helps reduce sick leave and create a better company culture and a happier workplace.

On the surface, it may seem that the more days off a worker takes in a year, the less productive they are, but the opposite is true. We are all human, and humans need breaks. That's why you should encourage your employees to take time off to relax and help them make the most of every vacation.

Managing sick leave during annual leave requires fairness and legal compliance. Prioritize employee well-being with IceHrm's solutions.