Employees are able to accrue annual leave while they are absent from work on long term sick leave, following the implementation of Section 86 of Workplace Relations Act 2015 which inserts a new section 19(1)(A) into the Organisation of Working Time Act 1997.

The key points on the amendment are as follows:  

  1. Can employees accrue both statutory and contractual annual leave? Only statutory annual leave entitlement can accrue during a period of certified sick leave.
  2. What is the retention period for accrued annual leave? Annual leave will not accrue indefinitely and an employee will be able to carry over such accrued statutory annual leave for a period of 15 months after the leave year in question.
  3. What employees does this amendment affect? The carry over period of 15 months after a leave year will apply to those employees who could not take annual leave due to illness during the relevant leave year or during the normal carry over period of 6 months in accordance with Section 20(1)c of the Organisation of Working Time Act 1997.
  4. What happens on termination of employment? Payment in lieu of untaken accrued annual leave will apply to leave which was not taken due to illness in circumstances where the employee leaves the employment within a period of 15 months following the end of the leave year during which the statutory leave entitlement accrued.
  5. Is the amendment retrospective? The amendment does not express itself to be retrospective but it would be seen as reasonable that employees out on sick leave prior to the 1 August 2015, that  this time will not count as working time for the purposes of accruing annual leave. This brings the Organisation of Working Time Act into line with recent rulings of the Court of Justice of the EU.

What does this mean for employers?

This change may have cost implications for employers. Employers should be aware of this amendment and review and amend their policies and procedures on sick leave and absence to ensure that they reflect this change.