Law firm Mace & Jones says construction firms face being hit with increased costs following a European Court of Justice ruling to allow workers on long term sick to continue to accrue holiday rights.
Mace & Jones employment law partner Phil Allen said the ruling meant that employees will retain the right to paid annual leave that they have been unable to exercise because of illness.
“This ruling will have far reaching consequences and risks hitting construction firms hard,” he said. “Employers should review all cases of employees on long term sickness absence, as retaining those employees on the books could cost roughly 8-11 per cent of salary a year, even if they are on nil pay.”
Mr Allen said employers concerned by the ruling should seek expert legal advice on dealing with the issue.
“Employers need to handle this issue with care,” he said. “Terminating contracts of employees on long term sick is very sensitive and employers are at risk of claims of both unfair dismissal and disability discrimination.”