One of the most confusing areas of employment law in recent years has concerned the impact of sickness absence on employees’ entitlement to statutory holiday and holiday pay.  These issues have been examined at judicial levels from Employment Tribunals to the European Court of Justice. Some key points that have emerged from these cases are set out below: Employees on sickness absence during a holiday year do not lose their entitlement to accrue annual leave. While on sickness absence, an employee can nominate a period of the sick leave as holiday and should be paid at the full contractual rate. An employee on long term sickness absence who does not wish to nominate a period of sick leave as annual leave is entitled to carry the accrued annual leave forward into the next holiday year. However, leave carried forward in these circumstances should be taken within 18 months of the end of the leave year in which it was accrued. If prearranged holiday coincides with sick leave the employee should be allowed to take the holiday at another time. On termination of employment, an employee is entitled to payment in lieu of accrued holiday that has been carried over, where the carried over leave relates to a holiday year in which they were absent for the entire year due to sickness.

The occasional absence from work for sickness in inevitable. This will usually be accepted by your employer and may be paid or not paid. Unfortunately, long periods of employee sick leave can cause significant problems for businesses, which may leave you concerned as to whether or not your employer has reasonable grounds for dismissal. However, dismissing an employee on long term sick leave is not necessarily a straightforward option for an employer, who will not want to run the risk and cost of a claim for unfair dismissal. That means it’s very important that employers treat an absent employee reasonably and supportively and follow a careful procedure before making any decision to dismiss. Contact from your employer when on sick leave When an employee is absent on long term sick leave, employers will see it as important to keep in contact with them. Note that this doesn’t mean calling them every day and asking when they are coming back, as this may amount to unreasonable treatment and give rise to a claim in its own right. However, you should expect your employer to keep in touch about how you are, your prognosis and when you think you will be able to return to work. How often it is reasonable to do this will depend on the particular circumstances, but you should make efforts cooperate in this contact. Assessing your health Before taking any action to dismiss, your employer is obliged to: look for ways to support their employee – e.g. considering whether the job itself is making you ill or exacerbating your illness and needs changing give you a reasonable amount of time to recover from your illness get an up to date medical report setting out your diagnosis and how long this is expected to last. The report may potentially include an indication of how your sickness affects you at work and what can be done to assist you. This process is seen as necessary and good practice so you will be expected to cooperate, and your contract of employment may compel you to. Sick leave & disability discrimination Bear in mind that your condition could well amount to a disability under the Equality Act 2010. You may not see yourself as a disabled person, but an employee will legally be classed as having a disability if their absence is caused by an impairment which has a substantial adverse effect on day to day activities, and is recurring or likely to last for 12 months or more. If this is the case, you have the right not to be discriminated against because of the disability. This will make it unlawful for your employer to dismiss you simply because you have the disability. This does not prevent you from being dismissed because you have been absent with your disability, however, because in this case your employer can do so if they can legally justify the action. This means that they will need to show that the action taken to dismiss you is proportionate and meets a legitimate business need. If you can show that your employer cannot legitimately argue that they need to dismiss, or there are other ways they could deal with your absence that do not involve dismissing you, they may be liable for discrimination. Your employer may also need to make reasonable adjustments where a physical feature of your workplace, or a policy or practice of your employer puts you at a disadvantage because of your disability. This is usually most relevant when your employer is using an absence policy to dismiss you; it will need to be adapted where it does not take into account your particular situation, for instance in the amount of time off that triggers dismissal. Your employer must be careful not to involve itself in disability discrimination, and you should be particularly mindful of this, as there is no statutory cap on the compensation you may be entitled to. Unfair dismissal: how long have you been employed? If you have been employed for more than two years, your position will be different from those with a shorter length of service, as longer term employees are protected against unfair dismissal. To avoid unfair dismissal your employer will need to: Receive an up to date medical report Your employer will generally be expected to have an up to date diagnosis and prognosis of your condition, and for this to be uncertain as to when you will be able to return to work or for it to say that you won’t be able to return to work for a reasonably significant period of time.  Explore all options Your employer should explore alternatives to dismissal. For example, would a change of position or a reduction of hours help you either to come back to work initially or as a permanent change? Would flexible working assist or are there any other reasonable ways which you can be supported and helped to return to work? Involve you in decision making process Your employer will normally be expected not to unilaterally present you with their solution. Instead, they should seek your input. Adopting a fair dismissal procedure Your employer will have to follow a fair process of dismissal. What this looks like will depend on your particular circumstances, but will typically involve obtaining up to date medical records, meeting with you to discuss the proposal to dismiss and get your views and suggestions, plus an appeals process. Ideally, your employer will have a long-term sickness absence policy in place. An example of this would be one which provides for different stages, for example, that after an absence of 28 days the employee should provide a medical report and or attend a “long term sickness review meeting”. The next point in the process might be after 3 months absence and the final stage might be at 6- or 12-months’ absence. Less than 2 years’ employment? Employees with less than 2 years’ service are not protected from unfair dismissal in the same way as longer serving employees are. However, discrimination must be avoided, and it will usually be advisable for them to follow a fair procedure as suggested above. Bear in mind also that the imposition of unilateral changes to your way of work may also give rise to a claim for unfair dismissal. Facing dismissal for being on sick leave? If you are on long-term sick leave and are worried about your job security, please get in touch with our team of employment law specialists. We are highly experienced in dealing with these situations.

Can employers take disability related sickness into account when dismissing for poor attendance? In the case of General Dynam4ics Information Technology v Carranza , the EAT considered this issue, and the question of whether it would be a reasonable adjustment not to take disability related absences into account. Background Mr Carranza suffered from abdominal adhesions, which was a disability under the Equality Act 2010. Mr Carranza’s disability caused him to be absent from work on numerous occasions. The employer would generally disregard any disability related sickness absence when looking at its trigger points for disciplinary action, although it could take it into account such absence once the disciplinary procedure had been triggered. Mr Carranza’s level of ordinary sickness absence had already triggered a formal disciplinary procedure and in 2011, he received a final written warning. Following the warning, Mr Carranza suffered two short disability related periods of sickness absence, although his employer took no action. Mr Carranza then suffered a shoulder injury, leading to 3 months’ sickness absence, which triggered further disciplinary action. At this point, the employer sought advice from occupational health, which confirmed the shoulder injury would heal but that the abdominal adhesions were a lifelong problem and periodic absences would certainly occur. Mr Carranza was dismissed and brought claims for disability discrimination and unfair dismissal. The employment tribunal found that the employer had failed to make reasonable adjustments, deciding that it would have been reasonable for the employer to disregard the final written warning (which had been imposed after the employer had taken previous disability related sickness absence into account). The Tribunal also held that the dismissal was unfair and that the circumstances of the final written warning should have been closely examined by the employer before dismissal. The employer successfully appealed. The EAT decided that there had not been a failure to make reasonable adjustments. The employer did not have to disregard the final written warning upon which the dismissal was partly based. The fact that the employer had made allowances and adjustments in the past, did not mean they had to entirely disregard warnings given and the reasons for those warnings. The EAT also decided that the Tribunal had been wrong to criticise the employer for failing to examine the final written warning prior to dismissal because there was nothing to suggest that it had been given in bad faith or was manifestly inappropriate. It was fair for an employer to dismiss where continued absence was likely to be a problem and where the employee had been disciplined in the past. Implications This case is helpful to employers insofar as it demonstrates that it is possible to fairly dismiss a disabled employee. Even where an employer has made allowances and adjustments in the past, it does not necessarily mean that all disability related absences should be ignored when reaching a decision to dismiss.  However, an employer should always seek up-to-date and appropriate medical evidence to help justify and support its decision.

Dealing with sickness absence is a perennial problem for employers and employees alike, with unfair dismissal and discrimination rearing its head at every turn. Our checklist will put employers and employees on the right track for a successful outcome. Policies Putting policies and procedures in place will help employers by setting standards of attendance and consistent treatment. They should be the starting point for sick employees in terms of what they can expect from their employer. Training Businesses should train managers on their policies and potential legal issues. Paper trail It is essential for employers and employees alike to keep an accurate record of all meetings and correspondence. For employers, file notes should be kept to make a record of all considerations, including those recommended here. Monitoring Companies need an accurate procure of patterns of absence, reasons, and hot spots. Categorisation Pregnancy and disability related absences should usually be discounted, subject in the case of disability to all reasonable adjustments being made and responses being proportionate and legitimate. Stay in touch Employers should take reasonable steps to stay in touch with employees absent on sick leave. Investigation Up to date medical evidence should be obtained and freely given before any significant steps are taken. The key factors for investigation will be the nature, extent, likely duration of illnesses, and presence of any disabilities. Short term/intermittent absences Explore the possibility of any underlying causes. If appropriate follow a capability or disciplinary procedure, providing warnings and clear yardsticks for improvement. Consultation This is an essential ingredient of any fair dismissal, and should be an expectation in relation to all items on this checklist affecting the employee. This means employers keeping an open mind. Essential considerations: adjustments to workplace and duties to enable a return to work. Make sure suggestions are reasonable. Possible adjustments include: staged return, adjusted hours, relocation of work station, and reallocation of duties. impact of the absence on the business. alternative employment. surrounding circumstances, for instance age, length of service, previous absence record insurance policies in place.