Q- My client has informed me that they have an ‘unwritten policy’ which lets staff who are unable to attend work due to sickness book this as annual leave so they don’t miss out on full pay. Is that OK?
A- Your client is not alone in encouraging this practice as many employers will allow their staff to do the same, particularly in the absence of any company sick pay. Although this is often thought of as a mutually beneficial arrangement, your client should consider where this may create issues further down the line.
Although there are many laws around the use of annual leave, it’s important to state that this practice is not unlawful. As long as your client provides staff with a minimum of 5.6 weeks of paid annual leave each year they are generally free to use it however they like. It is also easy to see how this may be an attractive arrangement for your client, as allowing staff to use up their holidays for individual days of sickness will reduce their opportunity to take longer, and potentially more disruptive, periods of leave throughout the year.
Having said this, your client should not force employees to use up their holiday in this way, as they may be able to argue that this is a breach of their statutory entitlement. Your client should also think about the long term impact this practice could have on employee wellbeing, especially as staff may not be using their annual leave for its true purpose.
It is important that your client understands the distinction between sick leave, which should be used for time off to recuperate, and annual leave which should be used as rest from work. Allowing staff to use up their holiday in this way will reduce their rest opportunities throughout the year and could easily lead to burnout, increased stress levels and an overall drop in productivity.
It will also be difficult for your client to track any patterns of sickness if the staff is regularly masking this with annual leave. Sick leave often acts as a trigger for employers to make reasonable adjustments at work, therefore your client may be less inclined to notice any ongoing medical issues that need addressing. Sickness absences can also be influential factors in things such as qualifying for bonus payments or redundancy decisions, however, your client will be restricted here if sick days are incorrectly being recorded as annual leave.
Ultimately, whilst continuing on with this practice is not unlawful, your client should consider if it is worth the potential negative repercussions. Should they do decide to do away with this unwritten policy, it would be wise to consult with their workforce first to uncover any other potential arrangement which may be more appropriate.