UK Employment Law. Holidays & Sickness. Redundancy

I found this article relating to Employment Law which I thought may be of interest. So here it is for you

Redundancy Payments

You may recall that in the budget earlier this year, Alistair Darling declared that to assist people being made redundant, the maximum week’s pay for the purposes of the statutory redundancy payment would be increased from £350 to £380.  However employees made redundant in the meantime will not be able to benefit from this largesse as it will only come into force on the 1st October 2009. There will then be no further increases till February 2011. In other words, the budget announcement may have looked good, but will not make a great deal of difference in practice.

Just as a reminder, employees with over two years service who are made redundant are entitled to receive a statutory redundancy payment of a weeks pay to a maximum (of currently £350) x full years worked x 1.5 for years worked over the age of 41. This can be easily calculated by visiting


Employees are also entitled to contractual or stautory notice (whichever is greater), or payment in lieu. Statutory  notice is 1 week for each full year worked to a maximum of 12 weeks.

The same method is also used to calculate ‘basic’ awards in unfair dismissal cases (‘compensatory’ awards in unfair dismissal being for the loss of earnings etc until the employee finds suitable alternative employment)

Accruing Holiday When Off Sick

Do employees on long term sick leave continue to accrue paid holiday under the Working Time Regulations? Back in January we reported the European Court of Justice decision in Stringer v HMRC which ruled that:

 A worker who is on sick-leave for the whole of an annual leave year is entitled to a period of four weeks’ paid annual leave, despite the fact they are not actually at work. In other words the right to paid holiday accrues even for employees on long term sick leave.

 The ECJ sent this back to the House of Lords to decide how this works in UK law which this week has held that this right can be enforced under the Employment Rights Act. What does that mean in practice? It means that the limitation period for bringing a claim is three months from the date of the last ‘deduction’ complained of (rather than three months for each deduction). Still not clear? Well, it means a lot more employees on long term sick leave will be able to sue if they don’t get paid holiday. Good news for employees; not such good news for employees.

In January, the ECJ suggested that that annual leave accrued by a sick worker must be carried over (rather than being forfeit if unused at the end of the particular holiday year). This however is something that the UK Regulations do not provide for, and which the House of Lords do not appear to have cleared up either. The best thing employers can do in the meantime is to address sickness absence issues before they become long term.  

James Carmody is lawyer advising on UK employment law in Central London. Please let me know if there are any issues arising in this article that you would like to discuss by contacting . (
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