Rulings handed down by the European Court of Justice on long-term sick leave are making it more difficult for smaller employers to take on staff.
The claim came in a poll conducted by the Federation of Small Businesses (FSB).
The ECJ has passed judgments in two sick leave cases under the Working Time Directive.
In one, the ECJ decided that an employee’s statutory entitlement to paid annual leave continues to accrue during long-term sick leave.
The FSB said that workers can take their statutory annual leave at the same time as sick leave and receive their normal rate of pay. Payments in lieu of leave upon termination of employment must include any untaken statutory annual leave even if the employee has been on sick leave for the whole of the leave year.
In the second case, the ECJ ruled that where a worker fell sick shortly before pre-arranged annual leave, they can request to take the period of annual leave which overlapped with sickness as annual leave at a later date. A worker who has been on sick leave for the whole or part of the leave year, and has not had the opportunity to take the leave, must be allowed to carry-over that leave into the next leave year.
In its survey assessing the effects of the rulings, the FSB found that, of 1,400 respondents, some 71 per cent believed that the regulation allowing workers to accumulate paid annual leave while on long-term sick leave would have a detrimental impact on the way firms employ people.
Of those, 38 per cent said they will be more cautious about taking on new staff with health problems, while 21 per cent will be less likely to take on new staff.
As far as the ruling that lets workers convert annual leave into sick leave is concerned, over half (54 per cent) thought it would have an adverse impact on businesses.
The FSB wants the European Commission to review the rulings and to reverse the court’s decisions.
John Walker, the FSB’s national chairman, said: ”It is well known that small firms are the country’s key employers and have done all they can to retain their employees and take on new staff throughout the recession. However, measures put in place by the European Court of Justice on sick leave are hampering small businesses’ ability to do the job at hand and help tackle unemployment.
“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 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 so that small firms have the best conditions to take on more staff and help pull the economy back onto the road to recovery.”