When plans of employees during pre-booked holidays fall apart for any reason, whether that be the collapse of the holiday company, or unexpected illness, different rules apply according to exactly what the circumstances are.
The basic rule is that the intention of the legislation, and therefore the thing that courts are likely to honour, is the employees need to have a break from work. If in doubt, this overarching intention is what should inform an employer’s decision making.
Collapse of Holiday Plans
Strictly speaking, this is not the employer’s problem and pre booked holiday is pre booked time off work, and not a pre-booked right to be in Ibiza (for example). So if, prior to the holiday, the employee’s plans are cancelled because of holiday company collapse, or road closures, or any other reason not linked to the employee, then the employer has the option of what to do.
The employer is free to insist on the employee taking the leave as booked (subject to employee’s right to cancel). It is not the employer’s problem as to whether that holiday is spent in Greece or Gloucester. The employer is free of course to take a sympathetic view, but that is entirely at the employer’s discretion.
If the collapse of plans happens while the employee is away, having already started the holiday, the employer remains free to treat the ensuing prolonged absence as they see fit. The employer could treat it as further holiday, or unpaid leave, but the employer can demand that the employee keep the employer up to date on developments.
The employer would not be free to dismiss if an employee with more than 2 years’ service could not return from holiday for reasons clearly beyond their control, at least in the short term. If however the absence continued beyond perhaps two weeks, then the employer would have more latitude.
Sickness During Holiday
An employee’s sickness during holiday is a different matter, and in most circumstances an employer faced with an employee claiming to have been sick during their holiday, would be entitled to see a doctor’s certificate. In fact, employer holiday policies should set this out clearly.
Once a doctor’s certificate has been provided, the employer would be required to change their records to show the absence as being for sickness and not holiday. This means that the employee would still have their holiday entitlement, but instead of getting holiday pay, they would get sick pay, either in accordance with the employer’s sickness policy or in line with SSP.
As always, in both cases, employers should consider the employment relations implications of their decision.