The Organisation of Working Time Act 1997 has been amended since August 1st 2015, to provide that any day of absence on certified sick leave is considered to be classified as time spent working for the purpose of accruing statutory annual leave.
The amendment brings employees in the private sector in line with public sector employees who already accrue annual leave while absent on certified sick leave. This change primarily affects those employees who are absent on long term sick leave, as an employee who works 1,365 hours in a leave year is automatically entitled to his statutory entitlement of 4 working weeks.
Generally, annual leave must be granted within the leave year to which it relates, or it can carried over and taken within 6 months of the following leave year, with the consent of the employee.
However, since 1st August 2015, the carry over period has been extended from 6 months to 15 months if an employee is unable to avail of his annual leave during the leave year or the normal 6 month carry over period due to illness. If an employee does not get the opportunity to take the annual leave within 15 months following the end of the leave year in which it was accrued, they will subsequently lose that entitlement as the maximum carry over period is 15 months.
Where a cessation of employment occurs within 15 months following the end of a leave year, and an employee could not avail of his statutory annual leave due to certified illness, that employee must be paid in lieu of any statutory annual leave accrued in that leave year and up to a maximum of 15 months after the end of that leave year.
For example, if an employer’s annual leave year runs from January to December. An employee is absent due to long term certified sick leave from January 2016 until he ceases his employment in February 2018. As employment ceases within 15 months following the end of the 2016 leave year, the employee must be paid in lieu of his statutory annual leave which accrued from January 2016 to his leave date of February 2018.
If the employment ceased in April 2018, the employee would be entitled to be compensated in respect of his statutory annual leave accruing from January 2017 up to April 2018, but he would lose his entitlement to the annual leave which accrued in 2016.