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Sick Pay or Holiday Pay?

2018
12
NOV

Sickness absenceAs an employer you may be unsure whether your employee can take holiday when they are off sick.  Employees can request that they use their holiday during periods of sickness instead of receiving sick pay.  Statutory Sick Pay (SSP) is paid after 3 days of sickness and is, in 2018-19, £92.05 per week.  As the first three days are unpaid this is often the period that employees would like to take as holiday so that they don't lose pay.

However employees can't request to take holiday they haven't yet accrued.  So, whilst holiday entitlement is calculated from the first day of working, the employee will not have accrued a day's holiday immediately they start working.  It would therefore be discretionary for the employer if they wanted to allow holiday to be taken instead of sickness absence.

Statutory Sick Pay (SSP) must be paid by the employer and hasn't been recoverable against NIC payable to HMRC for many years.  It remains the same weekly amount whether an employee works full time or part time.  Employees must provide self-certification sick notes for the first 7 days they are off sick and then a doctor's sick note for any subsequent periods of sickness.  As an employer you are not obliged to pay SSP if your employee does not produce a doctor's note for each period of sickness after the first 7 days.

Some employers will pay company sick pay and there will be different rules around this dependent on the employment contract.  

Both employers and employees need to weigh up the consequences of an employee taking paid holiday instead of sick pay.  An employee will be using up their holiday entitlement if they use holiday during periods of sickness and therefore may not have sufficient left to take a holiday they have already planned.  Employers will need to consider the employee's holiday entitlement for the year to date to see if they have accrued enough holiday and must take into account any other holiday the employee has already booked or any planned shut down of the business where employees are required to take holiday.  For both parties it is important to remember that holiday is a period of rest from work and that 4 weeks holiday is statutory.  If this 4 weeks is used to cover periods of sickness absence the employee will not have any holdiay entitlement for the rest of the holiday year, unless, of course, the employer allows unpaid holiday.  

If an employee becomes sick before or during a planned period of holiday, as long as they inform their employer at the earliest opportunity that they are sick, they can take this as sickness absence and be paid SSP and re-take their holiday at a later date.  If sickness absence makes them unable to use their holiday entitlement during the holiday year they can carry this forward into the next holiday year.

Related Tags:  Employees |  Sick Pay |  SSP | 
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