Can employees take holiday while on sick leave?

Overlapping types of leave can become confusing to manage! For example, can an employee take holiday while on sick leave? Senior employment solicitor Toby Pochron is here to explain this situation and the legal implications.

Taking holiday while on sick leave or being sick while on holiday presents tricky issues for employers to manage. There is the emotional aspect for employees, who feel that they may have lost out on leave or have spent a long time off sick and may need the pay – and there is the legal aspect as to what rights employees have to swap between their reasons for leave.

An initial point to remember – there is only ever one reason why an employee is away from work. That could be sickness, holiday, maternity, paternity, adoption, bereavement leave etc. While the reasons may vary, there is only ever one in place at any given time. What the reason is dictates the employees’ rights at the time and these are generally down to agreement between the parties or compliance with the rules and regulations.

Long term sickness and holiday

First port of call is to look at what happens in periods of long-term sick leave. The law relating to holiday rights and sick leave was in a state of uncertainty for many years, including whether a worker on long-term sick leave could take paid annual leave at the same time.

In a court case concerning sick leave and holiday from 2009, the European Court of Justice (ECJ) held that a worker can take their annual leave during a period of sick leave, but it was up to the relevant EU member state to work out how that was going to be put in place in practice.

The ECJ did confirm that if workers are prevented from taking their holiday because of sickness, they must be allowed to take it following their return to work, even if this means carrying it over to the next leave year.

In light of this, the case returned to the House of Lords (HL) to consider alongside the Working Time Regulations (WTR) 1998. The HL held that the WTR 1998 should be interpreted as allowing workers to take paid statutory holiday during periods of long-term sick leave, thus settling the debate on whether they can or not.

Reasons why employees can take holiday while on sick leave

By way of example, an employee can take annual leave while off sick if they:

Are sick over a long period of time, and a holiday might aid their recovery
Are not fit to work, but are physically able to take a holiday
Are suffering with a mental health condition that might be eased by a holiday

It is ultimately up to the employee to request the holiday while they are on sick leave. Employers cannot force their employees to take holiday during the period they are off sick, but it may be attractive for employers to offer this to employees so that the employee gets some full pay for a period and their rights to take leave on their return are reduced, to make planning their workload easier.

If the employer approves the holiday request, sick leave can then be paused while the employee takes their holiday, and they should receive holiday pay during that time. However if, after the employee has taken holiday, they are still not well enough to return to work, sick leave can continue.

When a booked holiday coincides with sick leave

Holiday cancelled because employee is sick

Where an employee goes on pre-arranged annual leave whilst they are signed off sick, they may still reclaim annual leave entitlement for that period.

In a different court case from 2009, the ECJ held that where a worker’s prearranged statutory holiday coincides with a period of sick leave, the worker must have the option to designate an alternative holiday period. Therefore, if workers do not wish to take holiday during sick leave, the holiday must be granted at a different time. This could even mean carrying it over to the next leave year.

Employers are still able to request proof of sickness – this would normally be via self-certification or a fitness to work statement from a healthcare practitioner.

With regard to what happens when a worker falls ill after the holiday period has started, in a court case from 2012, the ECJ held that, under the Working Time Directive (2003/88/EC) (‘the Directive’), a worker who becomes ill during their statutory annual leave must be allowed to reschedule that period of their holiday that coincides with when they were unfit to work.

Therefore, in terms of the Directive:

Workers who fall sick before a period of pre-arranged holiday should have the right to reschedule that holiday for a later date
If the worker then remains sick until the end of that leave year, they should be allowed to reschedule that holiday in the next leave year
Workers who become sick during their holiday should also be entitled to take the sickness-affected holiday at a later date

It is important to note that employees in Great Britain would not necessarily be entitled to enforce these rights on their employers, as a Directive is only binding on EU member states. Furthermore, contrary to the Directive, regulation 13 of the WTR 1998 does not explicitly allow workers to reschedule statutory holiday, or carry it over to the next leave year.

However, wherever possible, domestic tribunals and courts are obliged to interpret the WTR 1998 in accordance with the ECJ’s decisions. Given the approach taken in previous cases, it seems likely that they would read the WTR 1998 consistently with the ECJ's decisions.

To make a long story short – employees can elect to take holiday whilst on sick leave and can become sick while on holiday – keeping proper records and establishing how to proceed with this thorny issue is about communication with staff and ensuring that neither party feels prejudiced.

Managing employee leave with HR software

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Find out more about myhrtoolkit's leave management software and how it can help your business.

Written by Toby Pochron

Toby Pochron is a Senior Associate in the Freeths LLP Employment Law department. He was a Partner in the Employment Law department of Ironmonger Curtis.