Can an employee request to use annual leave instead of taking a sick day?

Q. As a small company, our sick pay benefits are currently not much more than a token gesture to add to the statutory sick paid benefits. When not sick, our employees are asking to use their annual leave to cover the loss of income. I have several reasons in HR as to why we don't want to do this, but what's the legal position?

Seamus: Yeah. I can certainly understand the difficulties this presents. Really, what you don't want to end up at is someone saying, "I'm going to take today off. I'll ring in sick, but tomorrow we'll treat it as a holiday," because, again, I suppose, getting back to the point that we just made, there's a bigger issue here in terms of why is the employee feeling the need to ring in sick or alternatively, if it's marked down as a holiday, do we lose sight of the fact that there's a sickness problem or there's an issue rising in respect to their employee and their ability to come to work.

So, it can be frustrating for an employer, absolutely, when the employee does that or makes a request for it, but it's within the gift of the employer to decide what to do there. Certainly, there are some equations where I can see it could be of benefit for the employee and the employer to use some holidays during a period of sickness. It gets the employee’s holidays used up. It means the employee is not coming back to work with a large number of holidays to take them out, maybe carrying them over to the following year. There are those sorts of arguments on both sides.

Scott: There's nothing legally stopping them.

Seamus: No.

Scott: It's just really not wise. If you're looking at a redundancy matrix and you're basing it on absence, then clearly this is going to skew the process. There's nothing intrinsically in law that says, "I want that day treated as a day's leave." If somebody wants to take a day's leave, they can.

Seamus: That's it. I suppose the other issue as well is you don't want this happening repeatedly to where you get to the point where the employee runs out of holidays or they don't have sufficient holidays later in the year in order to make sure they're recharged and capable of coming to work. The purpose of the holidays . . .

Scott: Is to make sure they're fit enough to continue.

Seamus: It can be very frustrating to an employer. I suppose you feel a loss of control. You feel concerned about an employee that's not playing by the rulebook in terms of holidays and it's that aspect of, "I'll just decide to ring in sick tomorrow and then I'll trade off as I can." There may be legitimate reasons why somebody will do that and say, "Look, I don't want to lose my bonus, my annual bonus every year because I get an attendance bonus if I don't take any sick leave. I prefer to treat that as a holiday." In some circumstances, I think it would be okay. In others, I can see how it can be hugely frustrating.

Q: When does the accrual of annual leave stop whilst on sick leave?

Seamus: Yes. We have looked at this before, but the position is that your holidays do accrue while you’re off on sick. Roughly speaking, it will carry over. The guideline principle is about a 15-month period that it will carry over for and the employee is entitled to use those holidays. That will continue to accrue up to that point. Then if they don’t use them, they’ll lose the entitlement around that 15-month mark. That’s sort of what we’re taking from case law at the minute.

I suppose it’s just about monitoring the build-up to the holidays and seeing if there is a best way. Often, what I will do is I get calls from clients that say, ‘They’ve built up all these holidays, can we pay them some of it?’ Or the employee will call and say, ‘Can I use some holidays? Even though I’ll mostly likely attend work.’ It’s working with the employee for the benefit of the business but also for the employee. In general, the terms you’re talking about, the carry over period on accrual of up to around 15 months.