Employers to be stung by ECJ ruling

RULINGS by the European Court of Justice (ECJ) on sick pay entitlements will spell greater costs for businesses and a raw deal for staff with genuine health problems, a top city lawyer says.  

Teresa Dolan, an employment specialist at Birmingham-based law firm Hammonds, says two recent rulings which mean holidaying staff can claim sick pay, could have unintended repercussions and is open to abuse.

“This is not just a problem for small companies but for businesses of all sizes, including larger ones who will experience an even higher cost because they have more staff.

“The court has ruled that if someone is ill when they are on holiday they can claim sick pay and reclaim their statutory leave.

“I think the key concern here is that this is open to abuse and the impact of these two cases is very unfortunate for businesses.”

Ms Dolan is responding to rulings made in the Pereda and the Stringer case, which has declared employees are entitled to accrue statutory leave even if they are ill for as long as an entire year and do no work.

However, Ms Dolan believes this will cause some firms to look to dismiss staff earlier, rather than wait until they will have to pay for their holidays too.   

“For employees who are on long-term sick leave, the fear is businesses will dismiss them at a far earlier stage.”

Ms Dolan’s comments come after the Federation of Small Businesses published research which found 38% of businesses will be more cautious about taking on new staff with health problems as a result of the rulings.