Help need with the finer points of Stringer and Pereda ECJ rulings on holiday pay and sickness please

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robwoollen Posted: 13 Sep 2012 9:52 AM

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I am looking for a little help on understanding how a couple of recent developments impact on statutory and contractual allowances please.

I was looking through a sickness policy the other day and it stated that "when sickness absence is over 4 weeks, holiday pay will cease to accrue". Further along it stated that "if you fall sick during a time that has been booked for holiday, you will not be able to take this as sick pay".

After the rulings last year (Stringer and Pereda), I suspect that both of these statements need to be adjusted. However what I am not clear on is how this works when the company already pays more than the law requires. I am a little unsure as to whether this refers to the statutory allowance, or to the contractual allowance. Given that they pay full pay for the first 4 weeks of absence, and half pay for the next 6 weeks, does the ruling apply only to the statutory entitlement? Or does it apply to all of the sick pay? If it applies only to the statutory pay, then could the company argue that they only need to top-up the pay of someone covered by these rulings to the amount which would have been covered by the SSP? Or is the ruling intended to ensure that people all get the same treatment regardless of illness, and therefore covers the full amount of contractual sick pay? Please note I am not thinking about what is good practice here, but about what they are obliged to do.

Example 1: If an employee books a week's holiday, but then falls ill during that week, and provides a Med3, can the employer pay them simply SSP for that week, and then give them back the holiday entitlement? Or would they have to pay full pay (as per the contract) AND give them back their holiday entitlement.

What if the company holiday entitlement is more than required by the WTD? Would they only be obliged to give them back the difference between the minimum entitlement and the contractual entitlement?

Example 2: If an employee is off sick for 26 weeks. They would be paid full pay for 4 weeks, half pay for 6 weeks, and then SSP. However the contractual sick pay that they have been paid over and above SSP would more than cover the holiday pay they would be entitled to accrue. So would the employer be entitled to disregard it? Or would the employer be obliged to continue to allow that person to accrue holidays which could be taken in the remaining 26 weeks of the year.

Finally - how do the rules for holiday pay work for people paid more days than WTD stipulates? The company in question pays 32 days per year, which is more than the 28 day minimum. However they pay only the basic wage, not including overtime and bonuses. There would be a tipping point at which this would not matter, but for someone earning a large amount of overtime per week, it could be that these 32 days at basic rate would not be as much as 28 days at the average of the last 12 weeks' actual wage. Does the company have to ensure that this does not happen, that the person receives at least 28 days holiday at the the average daily rate that they receive?

Thanks in advance for your help