If one were to believe the media hype, in addition to the usual difficulties employers face as a result of seasonal flu, an increasing prevalence of swine flu could reach new heights during the Christmas period as many employees may find themselves ill during their annual leave. As many work-places will be closed at some point over the Christmas period, it is likely that the full extent of employee illness during the holiday period won't be known until January. It is therefore likely that we will see number of cases entering the Employment Tribunal at the start of 2010 as employees try to test their extended rights based on the ECJ's recent decisions.

As a result, employers will need to be prepared to respond to any Challenge by an employee about their rights to sickness absence and should be ready for the knock-on effect that any claim could have as we enter the start of 2010, which is for many the beginning of the new holiday year.

In Pereda, the ECJ ruled that an employee who is ill during a period of holiday can count the time that they are sick during that leave as sickness absence rather than holiday. This means that once they return from their leave break they can retrospectively change the reason for their leave from holiday to sickness. Add this to the decision in Stringer and the impact is clear: the employee is then entitled to take the substituted holiday leave at another time, even if that means rolling the holiday over into the next leave year.

The decisions of the ECJ in both Stringer and Pereda were made in accordance with the European Working Time Directive rather than specific UK law.

In the private sector, employers are not directly bound by European Directives. This means that an employee could not make a claim against a private sector employer on the basis of a decision of the ECJ alone. The employee could only bring a claim in accordance with UK law.

There are currently some obvious conflicts between the UK law and the decisions of the ECJ. Most notably in that the Working Time Regulations don't make any provision for annual leave to be carried forward into the next leave year.  As yet we have not yet seen any amendment to UK law to bring the Working Time Regulations in line with these decisions. 

Only time will tell how these conflicts will play out, however it is likely that a Tribunal will be compelled to interpret the Working Time Regulations to comply with the ECJ's decision.

For public sector employers however, these decisions are very important. Public sector employers can be Challenged directly by an employee on the basis of a European Directive. It is essential therefore that all employers in the public sector are aware of these decisions and ensure that they comply.

So, if the law doesn't directly apply to a private sector employer but an employee tries to exercise their right to convert holiday leave to sickness absence, under Pereda, what could the employer do? 

One option may be to refuse to follow the spirit of the Pereda case and wait for further clarification from the Tribunals as to how it will be applied. This however, could be a dangerous strategy, firstly as it could have potentially disastrous consequences for industrial relations, and secondly as it could expose the employer to being one of the test cases brought before the Tribunal. This is particularly risky given that any decisions in relation to holiday pay could have retrospective effect and could lead to a hefty bill for an employer if a claim by an employee succeeds. It also means that any decisions taken this Christmas could have an impact at a later date.

Conversely, employers might choose to simply follow the ECJ's decision in Pereda and allow an employee to substitute any holiday time for sickness absence (and roll any holiday entitlement over) should they find themselves ill over the holiday period. This could have significant cost implications however, and could expose the employer to risk of abuse.

Employers will need to be particularly alert to cases of abuse over the festive season. While many of their workforce may be suffering a "headache" on New Year's Day, employers may wish to make sure that if any holiday is to be rescheduled due to illness that they have taken steps to verify its legitimacy.

It's also worth noting that employer's don't have to pay contractual sick pay unless the worker is unfit to do their job. The fact that an individual could not enjoy sledging due to a sprained ankle is beside the point.

What is perhaps a better option for the employer however is to allow the employee to exercise their rights under Pereda, but to control the way that the rights can be used. This would involve for example, setting specific criteria and requirements for how and when an employee could substitute their holiday leave for sick leave and getting policies and procedures in order. 

Good practice examples for an employee who claims they have been sick while on holiday could include:

• Requiring employees to follow the usual absence reporting procedures.

• Only paying Statutory Sick Pay (with the 3 day waiting period for SSP, this may discourage any false claimers from abusing their right to reschedule their holiday.)

• Requiring a doctor's note or occupational health assessment before paying any contractual sick pay

Employers faced with these issues on a large scale should take further advice to avoid storing up trouble for the future.