New 10 day per annum entitlement begins from 24 July 2021

As from 24 July 2021 employees’ minimum entitlement to sick leave under the Holidays Act 2003 increases from 5 to 10 days per annum. Employees are entitled to the extra five days at their next entitlement date.

The other key aspects of the law changes in this area are:

• Employees who already have an agreed entitlement to 10 or more days sick leave per year in their employment agreement will see no change;
• As before, employers and employees can agree to greater sick leave entitlements than the legal minimum – in other words, the parties to an employment agreement might for example agree to more than 10 days sick leave per annum or to allow all unused sick leave to accrue.
• The cap on accumulated sick leave remains the same at 20 days of unused sick leave. So this means employees can now carry over up to 10 days of unused sick leave each year instead of 15.

When do individual employees get the entitlement to the additional five days per year sick leave?

Employees get the extra five days on their next entitlement date occurring on or after the date the law takes effect (being 24 July 2021). That entitlement date will be either an employee reaching six months continuous employment or on their sick leave entitlement anniversary. A sick leave entitlement anniversary is the date 12 months after the employee was last entitled to sick leave.

So for a new employee whose six months’ continuous employment falls after 24 July 2021 the 10-day six leave entitlement will exist at the end of their six months of employment. 

For existing employees that already have sick leave entitlement, the increase takes effect on the anniversary of their entitlement date after 24 July2021. For example, if an employee was last entitled to sick leave on 20 July 2021, the employee would have to wait until their following sick leave entitlement anniversary on 20 July 2022 in order to get the additional five days sick leave per annum.

WHAT DO EMPLOYERS NEED TO DO?

Employers need to ensure that their systems and processes are updated to reflect the law changes. This includes:

• Ensuring payroll systems reflect the increase in sick leave;
• When employing new staff or creating new employment agreements, ensure that the sick leave entitlements record a 10-day annual entitlement and the ability to carry over up to 10 days unused sick leave entitlement to a maximum of 20 days total entitlement;
• Informing staff of the changes. Employers can update their employment agreements by way of a signed letter of variation, although the changes will bind employers anyway.

OTHER PLANNED CHANGES TO SICK LEAVE

The Government has begun work to implement the recommendations of the Holidays Act Taskforce, which includes giving employees access to some sick leave entitlement at the commencement of their employment, as opposed to the current six-month eligibility requirement. The Government expects to introduce legislation concerning this in early 2022.

Please contact Glenn or Jeremy if you require advice about the new changes.