Employee Sabbatical - an Attractive Alternative to Redundancy?

Employers may look during economic downturn for ways of reducing short-term employment costs without resorting to redundancy - this had led to a recent sharp rise in the number of employers offering sabbaticals to key employees.

Those who are at risk of redundancy may themselves consider suggesting sabbaticals as alternatives to losing their jobs; many employers will still be unaware of their availability or potential desirability.

Sabbaticals may provide benefits both to employers and to employees, whether in retaining key talent, improving morale or avoiding staff shortages (when the economy revives).

From both employer and employee perspectives, however, it is wise clearly and in detail to define employee entitlements during sabbatical and upon return.

Some key issues must certainly be considered:

• Who is entitled to or will benefit from a sabbatical?
• Is continuity of employment preserved?
• Do all contractual employment terms remain in force?
• Does an employee on sabbatical accrue annual leave?
• Is an employee’s job guaranteed on return?

Many questions may be answered by an employer’s general sabbatical policy document or by a letter, addressed to the employee, setting out the proposed terms; while basic legal employment rights may not be removed or modified by agreement, this is not the case in respect of contractual rights.

There is usually, therefore, a degree of contractual flexibility in the way in which sabbaticals may operate, but clear definition and recording of terms is essential.

Sound legal advice should always be obtained in such cases.

This article was written by Lara Murray, a Solicitor in our Employment department.

September 2009