Sick leave ruling could trigger hiring freeze

Long-term sick leave rules could prevent small businesses from taking on new staff, according to a survey.

A European Court of Justice ruling under the Working Time Directive means that statutory entitlement to paid annual leave will continue during long-term sick leave.
A survey from business lobby group, the Federation of Small Businesses (FSB), shows that almost three-quarters (71 per cent) of businesses say the changes will prevent them from hiring new staff because the costs of allowing staff to have paid annual leave at the same time as claiming sick leave is hampering businesses’ ability to take on new workers.
Of those, 38 per cent will be more cautious about taking on new staff with health problems, 21 per cent will be less likely to take on new staff and 17 per cent will be more likely to dismiss staff on long-term sick leave, said the poll.
The figures also show that a different ruling, also under the Working Time Directive –  to allow workers to convert annual leave into sick leave, taking the annual leave at a later date – will have a negative impact on over half (54 per cent) of the respondents’ businesses.
John Walker, national chairman of the Federation of Small Businesses, said: “These FSB-ICM figures show that the changes in the law on sick leave are hampering employment opportunities to get long-term unemployed back into work. The European Commission must look at the measures on sick leave while reviewing the Working Time Directive and ensure these are rewritten so that sick leave is actually classed as sick leave so that small firms have the best conditions to take on more staff and help pull the economy back onto the road to recovery.”
In recent cases, two European Court of Justice decisions (Stringer vs HMRC and Pereda vs Madrid Movilidad SA) and a tribunal ruling (Shah vs First West Yorkshire Ltd) have stated that employees should have been allowed to carry holiday entitlement into the following year when they were too unwell to take it.
A total of 1,400 respondents were quizzed as part of the survey.

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