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February, 2009
Annual leave accrues during sick leave
Stringer case causes headaches for employers
This old lady will do anything......
but will she take the sack.
Increase in statutory entitlements from April 2009
The government has announced the new rates of various statutory payments and statutory holiday entitlement
Many employers currently have clauses in their contracts of employment stating that annual leave does not accrue during long-term sickness absence, and that an employee cannot take annual leave while they are off sick. In addition, the same contracts are likely to state that the employee cannot be paid for holiday accrued while off sick unless the employee is leaving the company. These clauses were based on an intepretation of the Working Time Directive - this interpretation is now being challenged in the courts. The case of Stringer v HMRC was brought by a group of employees who wanted to challenge the belief that paid holiday cannot accrue or be taken during long term sickness absence. The case has spent many months working its way through the courts system, to the point where the European Court of Justice has now delivered its verdict. And what is the verdict?
The ECJ's findings in the Stringer case are as follows:
1. Employees who are absent on sick leave do accrue the right to paid annual leave while they are off.
2. An employee who is off sick for a full year and therefore unable to take annual leave must be allowed to carry their leave over into the next leave year.
3. However, a contract clause stating that annual leave is lost if not taken by the end of the leave year can be enforced, provided the employee has had the opportunity to take their full leave entitlement in the leave year.
4. At present, it is still possible for employers to state that employees cannot take holiday while on sick leave.
One extra complication is that the annual leave entitlement covered by the ruling above is only the minimum four weeks, as stated in the Working Time Regulations, and not the full statutory entitlement which rises to 28 days in April 09.
The ECJ's verdict is binding from now for public sector employers, although private sector employers can wait until the case is referred back to the House of Lords later this year before deciding how to act. Picasso HR will be amending handbook and contract templates for our clients accordingly.
Dear Picasso HR, We employ Ethel as a part-time cleaner. She’s a sweet old lady and will do anything for anyone. We recently celebrated her 63rd birthday and she has been with us a long time. We know she enjoys working here but we think that it’s getting a bit too much for her. She complains of her aches and pains and it seems to take her longer to get round our offices in the 2 hours a day, Monday to Friday and the cleaning isn’t as good either. She’s a widow and we know she needs this job. We are considering a few options; 1. Dismiss her because she can’t do the job as well as she used to, but we think that would be a bit harsh. 2. Ask her to reduce her hours so that we could employ someone else to help her, but of course we’ve got to consider the cost of employing another person. Besides, who would want just a few hours a week? Probably another old biddy! 3. Get a cleaning company to do it instead. Could you please give us your opinion on these options?
Dear Employer
Clearly you have a good relationship with Ethel. Let’s look at each option in turn:
1. Dismiss her on the grounds of capability. Basically she is unable to do the job to your requirements. Well, sit her down and ask her how she feels she’s finding things, without making it sound like you want her out! You might find that she has health issues. Often people open up about their problems when it is done in a caring way and I expect Ethel will be only too pleased to have a chat. Does Ethel know the standards she is required to work to? If not you need to make this clear by providing a job description and then performance managing her – talking to her every time the work is not to your standard. Although it would be sad, eventually you might have to follow a formal capability procedure; performance and/or health grounds.
2. Reducing her hours is a change in contract of employment. You can only do this through consultation and her agreement. You might find that she may not be able to afford to do that. Note that there are more people out there who want part-time work than you might think.
3. Beware that if you decide to bring in a cleaning company, TUPE (Transfer of Undertaking Protection of Employees) will apply and Ethel’s employment will be transferred to the cleaning company. This means that they could keep her on as your cleaner but they would be responsible for her performance.
Of course you might just want to manage her softly till she reaches 65, in which case don’t forget to follow the statutory retirement procedure.
From April 2009, the following statutory payments will apply: From 5th April 2009: Statutory Maternity, Paternity and Adoption pay increases from £117.18 to £123.06 From 6th April 2009: Statutory Sick Pay increases from £75.40 to £79.15 per week In addition, the entitlement to statutory holiday entitlement will increase from 1st April 2009 to 28 days per annum. Part-time employees and casual workers will have the same entitlement on a pro rata basis.
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