How To Manage Annual Leave And Sick Leave Overlap

You’ve booked a week off work and filled it with exciting plans. You’re going to take a trip to the beach, finally open that book you’ve been meaning to read, make a long overdue visit to your parents, and generally recharge your batteries. Then it happens, day one of your holiday and you get sick. What could be worse? Not being able to cancel your leave would be a start.

Getting sick during annual leave is the last thing anyone wants, but it happens. As a manager, knowing ahead of time how to deal with this type of leave overlap, including what the law says, will make managing it a piece of cake.

What to do when employees get sick during annual leave?

Put simply, if someone gets sick during annual leave then yes, you need to give them the option to cancel their annual leave, record it as sickness, and allow them to take the annual leave at a later date It’s only fair, given that they’d be allowed to take sick leave if they weren’t off on holiday in the first place.

Forcing someone to take precious annual leave when they can’t do anything with it isn’t only mean-spirited, it’s probably bad for your business, too. Taking time off is important, giving people the chance to relax, unwind, and focus on the things that bring them joy.

If their long-awaited week of holiday is ruined by a stomach bug or bout of flu, they’re not going to benefit from it. Taking away their option to use those days of annual leave at another time means they’re more likely to suffer from burnout or lack of motivation in the long term and will end up being less productive overall.

European Court of Justice ruling

Making things even simpler, this idea is covered by law, too. The European Court of Justice ruled all the way back in 2012 that ‘a worker is entitled to take paid annual leave which coincides with a period of sick leave at a later point in time’.

They did this on the basis that there’s a fundamental difference between the purpose of sick leave versus annual leave. Annual leave is supposed to give people the chance to rest and relax however they want to. Sick leave, on the other hand, is specifically given so they can recover from an illness.

The ECJ ruling, related to the Stringer v HMRC case, even included guidance on how it relates to the existing Working Time Regulations 1998. The quick summary is that employees on sick leave should still accrue statutory annual leave allowance and any annual leave that’s cancelled as a result of sickness absence is allowed to be carried over to the next year.

Can employees take annual leave while on long-term sickness absence?

The other side of annual leave and sick leave overlap is the question of whether people can purposely use paid holiday days while they’re on a period of long-term sick leave. They might want to do this to top up their statutory sick pay, using holidays as a way to get full pay even while they’re on sick leave. The short answer is that, legally, there’s nothing stopping them.

But that’s not to say it’s a great idea to allow it. There are a couple of problems with giving people the chance to use their annual leave allowance during sick leave, including that it’ll mess with your understanding of the level of sick leave in the business when you’re looking back over the year.

More cynically, you can also imagine a situation where somebody tries to request a holiday at short notice which is denied, but they then take the day off sick instead only to later convert it into a day of annual leave.

Your position on using annual leave during sickness absence should be made clear in your sickness absence policy to avoid any doubt about what your team can and can’t do.

How important is time off?

Giving people the chance to chill out by taking time off from work (that isn’t plagued by sickness!) is enforced by the law for a reason – it’s hugely important to wellbeing. Time off doesn’t just help people relax and recharge before getting back to being productive, it’s likely to reduce sickness absence and contribute towards better company culture and a happier workplace.

On the surface, it seems like the more days off an employee takes in a year, the less productive they’ll be, but the opposite is true. We’re all human, and humans need breaks. That’s why you should be encouraging your people to take time off to relax, and helping them make the most out of every holiday.