Date 19 August 2009
Sabbaticals are rarely considered by employers as a way of reducing the costs of employees on a temporary basis. In the current economic climate this can be an interesting alterative to other cost cutting exercises such as pay freezes and redundancies.
What are the benefits to Employers?
Flexibility: Parties can agree the period of sabbatical giving the business much needed “breathing space/short term relief” from the costs of employees.
Retention: The employer can ensure it does not lose it’s skilled staff through redundancy. When work does increase the business will also have staff to recall without the cost of recruitment.
Morale: Redundancy can impact on staff morale even those that remain with the business after a redundancy exercise. Offering sabbaticals demonstrates that the business will consider alternatives to redundancy and retain staff.
The benefits to employees can include the opportunity to train / study / undertake voluntary work or explore other fields of work with the security that they will return to employment.
What are the legal requirements to consider?
Before the sabbatical commences it is recommended that you put in place a sabbatical policy and record the terms of the sabbatical. These can include the duration of the sabbatical and the terms of the contract of employment that will remain in force. The terms you should consider are;
1. Continuity of employment.
Generally sabbaticals are regarded as preserving continuity of employment. It is advised that it is agreed with the employee from the onset whether or not they will retain their employment status with the business. If the sabbatical is for a longer period such as over one year, the employer will need to carefully consider whether this is appropriate.
2. Contractual Terms
The advantage of sabbaticals is that there are no set rules as to what contractual terms will apply during the period. If it is agreed that an employee will retain their continuity of employment (see above), then their statutory rights will accrue such as sick pay and holiday pay. With regard to the employees’ contractual rights, it should be agreed that pay and other contractual remuneration such as pension or private medical insurance will be suspended during the sabbatical period. However, the employer will want to ensure that any restrictive covenants and confidentiality obligations on the employee do remain in force to protect the business. The business could also agree that the employee will not work for a competing business during the sabbatical period.
Finally you will need to consider what will happen when the sabbatical period comes to an end and the employee looks to return to their position. The employer may want to not guarantee that they will return to their former job but that they will use reasonable endeavours to find a suitable comparable position.
The major action points to consider are:
- When offering sabbaticals to employees, do not forget absent employees such as those on maternity or sick leave. You may wish to require that they have to return from maternity leave or are declared medically fit for work before the sabbatical period commences;
- Record the terms of the sabbatical in writing; and
- Ensure you have the employee’s agreement to the above.
If you require further advice on sabbaticals, or any employment law issue, please contact Nikki Petken on 01727 798023 or by email at nikki.petken@salaw.com.
© SA LAW 2009
Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them. You are recommended to obtain specific advice in respect of individual cases.