Friends Provident has voiced concerns that EU rules on long-term sick leave could impact on IP product design, as the Federation of Small Businesses (FSB) notes the ruling is dissuading small businesses employing new staff.
A European Court of Justice ruling, made last year under the Working Time Directive, means that statutory entitlement to paid annual leave will continue during long-term sick leave.
A different ruling under the Working Time Directive will allow workers to convert annual leave into sick leave, taking the annual leave at a later date
The debate on the Working Time Directive reopens this autumn, and the FSB is urging the European Commission to review these Court rulings to ensure the law is rewritten to reverse these decisions.
Declan White, Group Risk Marketing Manager at Friends Provident, is also concerned about this ruling and its potential effects on the group risk market.
"Clarity for this issue would be very much appreciated by the industry," he says.
"It's not as big an issue as the default retirement age, but it may impact on product design.
"And there are potentially employers wanting to cover that EU ruling in terms of their GIP policy.
"It might incur a small cost to the policy, but its small beer compared to the default retirement age where the costs could be quite substantial," he adds.
John Walker, national chairman at the Federation of Small Businesses, believes the measures put in place by the European Court of Justice on sick leave are hampering small businesses' ability to help tackle unemployment.
A FSB-ICM poll of more than 1,400 respondents shows that the ruling will affect the way 71% of businesses employ staff.
Of those, 38% will be more cautious about taking on new staff with health problems, 21% will be less likely to take on new staff and 17% will be more likely to dismiss staff on long-term sick leave.
It also adds the Working time Directive will have a negative impact on over half (54%) of the respondent's businesses.
"Small businesses understand the need for good health in the workplace and are like a family, knowing and understanding the needs of their staff," Walker says.
"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," he adds.
