If an employee falls ill during a period of booked holiday, then, provided they notify the employer, they are entitled to convert the holiday to sick leave. This saves them holiday days which can then be used at another time. What does this mean for employers?

Here are some key points:
 

• Time off on holiday is paid as normal pay. Sick leave rules are different. If the employer pays Statutory Sick Pay, only then will this be payable (if the employee is entitled to it). If the employer operates enhanced sick pay, then this would be payable instead, unless policies state otherwise.
   
• Make sure that the absence is logged as sickness on any attendance management system. Absences on holiday are not generally monitored, but the monitoring of sickness absence is very important. Again, a clear rule on this makes it less likely that employees will seek to re-categorise their leave as sick leave without good reason.
   
• Consider what evidence you can require the employee to produce in relation to their sickness. If the employee is abroad, then they may struggle to obtain a medical note. However, you could include in your sickness policy a requirement to produce medical evidence if possible. You could even agree to reimburse the cost of obtaining a doctor’s note abroad.
   
• If calling in sick whilst on holiday is a particular issue for your business, then consider amending your sick pay policy to state that any absences for sickness during pre-booked holidays will be paid at Statutory Sick Pay only. This provides a financial disincentive.
   
• If an employee falls sick whilst on holiday and there is not enough time in the current holiday year for them to take the holiday days they have effectively ‘recouped’ whilst being off sick, then the employee must be allowed to carry over the holiday into the next holiday year. This rule applies to four weeks every holiday year (or the full 5.6 weeks for part year and irregular hours workers for holiday years beginning after 1st April 2024). The carried over holiday must be taken within 18 months of the year it accrued.