An an employer you have certain legal responsibilities to your staff if they are unable to work due to illness, some employers also offer extra benefits as they grow.
When you gave your employee their Written Statement of Employment you will have stated what their entitlement is for paid sick leave.
Legally you must pay Statuatory Sick Pay if your staff meet the requirements, this is triggerred by absences exceeding 3 days. The Government provide a calculator to help you work out how much to pay.
If your employee may be off long-term you can use the Fit for Work occupational health scheme to get an occupational health assessment and general advice as an empoyer. This service is free.
Annual leave will still be accrued in the same way as if the employee was at work.