It happens more often than you'd think. Someone books a week off, heads away, and comes back to tell you they spent three of the seven days in bed with flu, or worse, in a hospital abroad. Are they still on annual leave for those days, or are they now off sick? And who decides?
This is one of those situations where the answer feels like it should be obvious and isn't, so here's the actual legal position, plus a simple process you can follow the next time it comes up.
The short answer
If an employee is genuinely sick during a period of pre-booked annual leave, they're entitled to reclaim those days as sick leave and take the annual leave at another time instead. This comes from a well established principle in UK and EU derived case law: annual leave exists so people can rest and enjoy time off, and being ill doesn't achieve that purpose, so it shouldn't be forced to count against your holiday entitlement.
This only applies to genuine sickness, and it only applies if the employee actually tells you. It isn't automatic.
Annual leave and sick leave are separate entitlements
The reason this rule exists is that annual leave and sick leave are two different legal entitlements, not two labels for the same pot of days off. We've covered the distinction in more detail in sick leave vs annual leave: what's the difference and why it matters, but the short version is that annual leave is planned and chosen by the employee, while sick leave is unplanned and triggered by illness. An employee shouldn't lose one because the other happened to fall in the same week.
What the employee needs to do
For a sickness-during-holiday claim to stand up, the employee needs to notify you, following your normal sickness reporting procedure, just as they would if they were sick on any other working day. A quiet mention weeks later that "I wasn't feeling great on the Tuesday" doesn't count.
The usual self-certification and fit note rules still apply:
- For up to seven days, self-certification is enough. Your normal sickness form or a simple email confirming the dates and that they were unwell will do.
- Beyond seven days, they'll need a fit note from a GP or other approved healthcare professional.
If the employee was abroad, a letter from a local doctor or hospital, or evidence of a medical appointment, is reasonable in place of a UK fit note. It's sensible to agree in writing what's being reclassified and why, both to protect the employee and to keep your own records straight if the same thing happens again with someone else.
What happens to the reclaimed leave
Once the days are reclassified as sick leave, the annual leave they would have used is given back to the employee to take another time. That's the whole point of the rule.
This can create a genuine scheduling headache if it happens near the end of your leave year, because there might not be enough time left to actually take the days. The good news is that employers can't simply let the days lapse in this situation. Where a worker has been unable to take their statutory annual leave because of sickness, they're entitled to carry it over into the next leave year rather than lose it. We go into the carry-over rules in more depth in annual leave carry over: what the rules are and how to manage it, which is worth a read if this comes up close to your year end.
What about pay?
For the days reclassified as sick leave, the employee moves onto whatever your sick pay arrangements are, whether that's contractual sick pay or Statutory Sick Pay (SSP). One thing worth knowing if you haven't checked recently: SSP now applies from the very first day of sickness, with the old three waiting days scrapped. So there's no gap where the reclaimed days fall into a no pay zone before sick pay kicks in.
For the days that remain annual leave (the untouched part of the holiday, or the days taken later once rebooked), the employee is paid their normal holiday pay as usual.
What if the illness carries on after the holiday ends
Sometimes a case of flu picked up on holiday turns into a longer absence once the employee is back. If that happens, you're simply managing an ongoing sickness absence at that point, and our guide on how to manage long term sickness absence covers what to do from there, including return to work conversations and when to involve occupational health.
What if they don't tell you
If an employee doesn't notify you of the sickness at the time, or well after the fact with no supporting evidence, you're under no obligation to retrospectively reclassify the days. The default position stands: it was booked as annual leave, so it's treated as annual leave. Being reasonable and applying common sense matters here too. A genuinely serious illness with clear evidence, reported as soon as was practical given the circumstances, is a different situation to a vague claim with no paper trail submitted a month later purely to get the days back.
A simple process for small businesses
You don't need a lengthy policy for this, just a clear, consistent approach:
- The employee reports the sickness as soon as reasonably possible, using your normal sickness reporting method.
- They self-certify for up to seven days, or provide a fit note (or equivalent evidence if abroad) beyond that.
- You reclassify the affected days as sick leave and agree in writing which days are being given back as annual leave.
- The employee rebooks the returned annual leave for another time, ideally sooner rather than later if your leave year is close to ending.
Having this recorded properly matters more than it might seem, particularly if it happens more than once with the same employee, or if a leave year end is approaching and carry over becomes relevant.
How Absently helps
Because Absently tracks annual leave and sickness as genuinely separate leave types rather than one shared allowance, reclassifying a period like this is straightforward. You simply record the sickness dates against the employee's sick leave, and the annual leave days are automatically returned to their balance, ready to be rebooked whenever suits. No spreadsheet formulas to unpick, no manually adjusting a running total by hand.
If you're still tracking leave in a spreadsheet or a shared calendar, this is exactly the kind of edge case that tends to cause mistakes, usually because someone forgets to add the days back, or adds them back twice. Start your free trial and see how much simpler it is when the system does the reclassifying for you.