06 Jul Changes to Sick Leave Accrual

Whilst the focus of the long awaited Work Place Relations Act has been on the much needed changes to the employment disputes structures, a very important change to the accrual of sick leave for employees who are absent on long term sick leave is also being introduced.

The newly enacted Work Place Relations Act 2015 as well as bringing in a number of changes to how employment disputes will be dealt with going forth also introduces a significant change to annual leave accrual for employees on long term sick leave. Prior to this, under the Organisation of Working Time Act 1997, employees in effect largely accrued annual leave on the basis of hours actually worked and not during periods of sick leave.  However, an European ruling on this subject, previously held that employees on long term sick leave should continue to accrue annual leave during such periods of sick leave and Section 86 of the new Act amends the  Organisation of Working Act accordingly as required to do so on foot of the European ruling.

In practice this means that employees who are on long term leave due to illness will now be entitled to accrue their annual leave entitlement and will be entitled to paid time off for the accrual of such leave or for payment to be made on termination of employment in lieu of taking leave.

The Organisation of Working Time Act 1997 also currently requires an employer to ensure that employee takes their annual leave entitlement within the leave year in which it falls, or with the consent of the employee within an extended six month period into the new leave year.

This provision has now been amended in the case of employees on sick leave and the Work Place Relations Act 2015 provides that employees who are unable to take all or any part of their annual leave during the relevant leave year or the subsequent six months of the next leave year, may have an additional period of 15 months after the end of the leave year within which to take the accrued leave.

These new provisions in the Work Place Relations Act 2015 regarding the accrual of annual leave clearly have the potential to introduce additional costs for employers and it would be wise to ensure that a timely and robust approach is taken to managing employees on long term sick leave to minimise such costs arising, where it may previously have been considered not to matter how long employees remained off.