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April 12, 2010

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Sick-leave rules “hampering” small firms

New rules on long-term sick leave are affecting the way most small businesses employ new staff, according to the results of a poll by the Federation of Small Businesses (FSB).

Last year the European Court of Justice ruled that employees who are absent from work on long-term sick leave are entitled to take all holiday they have accrued when they return to work.

It also said that workers whose contracts of employment are terminated, or who decide to leave a company, are entitled to receive a lump-sum payment equivalent to the amount of holiday they amass while they are off work for illness.

The FSB survey, which questioned more than 1400 small businesses, found that, as a result of the court ruling, 38 per cent of respondents will be more cautious about taking on new staff with health problems; 21 per cent will be less likely to take on new staff; and 17 per cent will be more likely to dismiss staff on long-term sick leave.

In another ruling, the Court decided that where a worker is sick during a period of planned annual leave, the time off must be granted to him for a different period and, if the worker is prevented from taking it during the current holiday year, they can carry it over to the next one. More than half of respondents said this ruling would have a negative impact on their business.

The FSB wants both decisions, which were made in relation to the Working Time Directive, reversed. At the same time, the group is calling for more promotion of the fit note, which replaced the sick note as part of new rules that came into force last week (6 April). The FSB believes the new system will help ease staff on long-term sick leave back into work and give small businesses more incentive to keep hold of staff.

Commenting on the results of the poll, the group’s chair, John Walker, said: “Small businesses understand the need for good health in the workplace and are like a family – knowing and understanding the needs of their staff. But these FSB figures show that the changes in the law on sick leave are hampering employment opportunities to get long-term unemployed back into work.

“The European Commission must look at the measures on sick leave while reviewing the Working Time Directive and ensure these are rewritten so that sick leave is actually classed as sick leave – giving small firms the best conditions to take on more staff and help pull the economy back on to the road to recovery.”

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