Overview
This article explains the important differences between Annual Holidays in Advance and Sick Leave in Advance as they relate to the Holidays Act 2003.
While both involve an employee taking leave where the entitlement has not yet "arisen" (at leave anniversary date) they may be handled very differently.
Annual Holidays in Advanced - has a framework in the Holidays Act, whilst Sick Leave in Advanced - has no such framework.
⚠️ NOTE: This article provides a general overview of "leave in advanced" principles. If you have any questions relating to a specific employee's agreement or your legal obligations, please raise this with your payroll contact or seek employment relations advice.
Annual Holidays in Advance
The Holidays Act 2003 includes a specific framework that allows an employer and employee to agree to the employee taking a portion of their annual holidays 'in advance'.
The key requirement is that it must be a mutual agreement in writing between the employer and the employee.
An employer is not obligated to agree to a request for annual holidays in advance.
If an employee leaves the company, the employer is entitled to deduct the value of any advanced holidays (that have not yet been accrued) from the employee's final pay.
Sick Leave in Advance
Conversely, "Sick Leave in Advance" is not a statutory entitlement under the Holidays Act 2003. The Act only provides a minimum entitlement after 6 months of service*; it does not give an employee the right to take paid sick leave they have not yet earned.
Granting sick leave when an employee's balance is nil is a discretionary decision made by the employer, based entirely on private or mutual agreement. This agreement can take two forms:
A specific clause in the Employment Agreement that outlines a company policy (e.g., "The company may, at its discretion, grant up to 5 days of sick leave in advance.").
A one-off, case-by-case agreement made at the time of the illness.
If there is no policy in the employment agreement, the employer is not obligated to pay the employee, and the options must be discussed.
Scenarios and Outcomes
The correct action to take depends on the leave type and the agreements you have in place. The table below outlines the common scenarios and their correct outcomes.
| Scenario | Agreement / Policy | Correct Action / Outcome |
|---|---|---|
| Employee requests Annual Holidays in Advance. | (Governed by Holidays Act) | Employer and employee must mutually agree. If agreed, proceed with the leave. |
| Employee (no sick leave balance) is sick. | Employment Agreement contains a clause for sick leave in advance. | Follow the policy as written in the agreement. Process the Sick Leave and it will be deduct from the next entitlement. |
| Employee (no sick leave balance) is sick. | Employment Agreement is silent / no policy exists. | The employer and employee must agree on one of the following options:
|
| Employee (no sick leave balance) is sick and no agreement is reached. | No policy and no one-off agreement | The default outcome is Leave Without Pay - (excluding annual holidays) taken, as there is no statutory or contractual entitlement to paid sick leave. |