Accrual of Annual Leave and the Workplace Relations Bill 2014

How annual leave accrues when an employee is on sick leave is due to be changed by the provisions of the Workplace Relations Bill 2014.

Current position:

Under the Organisation of Working Time Act 1997, an full time employee is entitled to statutory minimum entitlement of four weeks’ paid annual leave. It provides that annual leave is calculated on the basis of time worked but is silent on the issue of how time spent on sick leave should be regarded for the purposes of calculating annual leave.

Changes:

For the purposes of calculating annual leave, a day where an employees is on sick leave shall be deemed as if the employee is present and working.

The Bill further provides that where an employee is unable to take accrued leave, due to illness, during the usual leave year, then the time accrued may carry-over of maximum period of 15 months from the end of the year in which it accrued.

The Minister for Business and Employment, Ged Nash TD said “We have struck the right balance between protecting the rights of vulnerable workers who are off work due to serious illness and trying to minimise the cost to business”

The Bill is due before the Dáil this week. If passed it could have significant implications for employers’ payroll and business. Under the circumstances, employers should review their leave and sick leave policies to ensure proper mechanisms are in place to manage situations where employees go on extended sick leave.

For advice on leave and sick leave policies, please contact Julie Mullan.