From sick pay to annual leave

Peninsula Team

July 22 2015

If you have paid an employee statutory sick pay for time off and they request it to be taken as annual leave, do you need to agree to their request? 

The interaction between sick leave and annual leave can be complex and will change dependent on the circumstances of the individual facts.

Employee has already been paid for sick leave and then asks to take it as annual leave

As the employee is asking retrospectively for the type of leave to change, after payment of statutory sick pay has taken place, there is no legal standing on this and no legal basis for you to have to agree to this. Agreement to this request will be dependent on what you have previously done in your business, i.e. have you previously agreed to such a request so you have now created a precedent to continue agreeing. If there is no previous standing on this issue, it will be for you to decide whether to agree to this request, though consideration should be taken to the fact that this will create a basis for you having to agree to this request in the future. 

Employee has just started a period of sick leave and wishes to take this as annual leave

Employees may take annual leave when they are on sickness absence, but if they wish to do so, they will need to treat it in the same way as if they were in work, i.e. following your annual leave booking procedure. This means that you are able to refuse the annual leave request. Whilst paying holiday pay may cost more in the short-term than paying statutory sick pay for the period, this will be beneficial in the long term because it will reduce having to pay the employee for two periods when they are away from work – one period of sick, and one period of annual leave later on.

Employee is on annual leave and then informs you they are sick

Employees who are absent from work on preplanned holiday leave, and then fall sick whilst on holiday, are entitled to take sick leave for this period and receive the holiday back to take at a later time but they must inform you of this in the same way as if they were not on holiday i.e. follow your sickness notification procedure. This is because the purpose of annual leave is to provide rest and relaxation for the worker and, the courts have judged, that being sick during this time will not provide for this rest. Therefore, if your employee informs you they are sick during annual leave, you should change this leave to sick leave, pay statutory sick pay instead and bank the holiday leave to add to their remaining leave entitlement.

If you need any further clarification then please contact the Peninsula Advice Service on 0844 892 2772. 

Suggested Resources