A payment time bomb has started ticking for Midlands' employers with long term sick on their payroll, according to a leading lawyer.
Tim Lang, partner and head of employment at Black Country firm George Green, says an opinion by the European Court of Justice's Advocate General means that employees on long term sick leave will soon be entitled to holiday pay.
"At present in the UK, employers can leave employees who take long term sick leave on their payroll, safe in the knowledge that once they have moved from statutory sick pay onto state benefits, there will be no further cost to the business, as when an employee is off sick, he does not accrue any leave," said Mr Lang, who is based in the Cradley Heath office.
"However, this opinion on a UK case from the ECJ Advocate General means that workers who are absent on sick leave will still accrue entitlement to the minimum annual leave provided for by the Working Time Directive, and should be able to take the leave if they return to work, or more likely, to be paid in lieu.
"This means that employers may be building up a liability for holiday pay to people who they may have forgotten that they still officially employ."
The Advocate General's opinion does not have the force of law until the European Court of Justice formally makes a ruling, which it is expected to do sometime this year.
Mr Lang said: "We are advising employers to put in place a policy now which does not allow employees who take long term sick leave effectively to remain on the payroll indefinitely. There should be a process in place which brings an end to the period of sick leave, either by rehabilitating the employee or by terminating their employment."
DLA Piper partner Nick Jew, head of employment, added: "One question which is not explicitly addressed by the Advocate General is what happens when the employee's sick leave straddles the end of a leave year.
"It can only be hoped that clarity is given by the ECJ in its final decision on this matter."