Written by Richard Rowell
Published on February 14, 2010

The interaction between sick leave and paid annual leave is particularly complicated and does not necessarily follow logic from an employers perspective.

This has left many employers and payroll service providers confused over paying employees and what their entitlements are. We are delighted to see that the Department for Business, Innovation and Skills has launched further guidance following the European Court of Justice (ECJ) decisions in the Stringer and Pereda cases.

The guidance released in the wake of these cases makes it clear that:

  • Statutory holiday continues to accrue during sick leave
  • Workers can take their statutory holiday during sick leave but if they choose not to, they must be allowed to take it a later date, including in the following leave year

You can find a copy of the guidance payroll guidance here.

While the guidance is relatively basic it does contain an interesting point because the Working Time Regulations do not currently permit the four week's basic statutory holiday to be carried over into a subsequent leave year.

BIS have stated that they will be consulting on a possible amendment to the Working Time Regulations.