Sick Pay
An employee who is eligible for Statutory Sick Pay of up to £88.45 (2014) per week for 28 weeks. Businesses may operate their own sick pay scheme offering better terms but not lesser terms.
Annual leave accrues during time off for Sick Pay. Sick pay is paid for days when an employee normally works, which are termed qualifying days. It may be subject to deductions including tax and national insurance.
Agency workers, directors, and educational workers have different entitlements. Their entitlements are based on average weekly earnings.
Entitlement to Statutory Sick Pay generally arises after three months’ employment. Employment continuity is broken by periods of sickness or more annual leave or if the employer is unable to offer work.
Educational term-time workers’ entitlement varies with the terms of their contract. They are not entitled to Statutory Sick Pay if they are sick outside their contract period.
There are special provisions in respect of directors’ fees and remunerations. Persons who are directors may also be employees in the normal way and have entitlement accordingly.
The entitlement to Statutory Sick Pay arises when an employee has been sick for four days in a row. It is not payable for the first three qualifying days, unless they have been off sick and in receipt of Statutory Sick Pay within the previous eight weeks. Generally, the entitlement stops when the employee comes back to work or ceases to qualify.
Records must be kept for HMRC in respect of all periods of sickness lasting more than four days, all payments, and for which payment was made, together with the reasons why.
In order to qualify, the employee must be:
- Employed under an employment contract.
- Have worked under the contract.
- Have been ill or sick for more than four days in a row.
- Earn at least £112 a week.
- Give the required notice.
- Give proof of illness, after 7 days.
Employees do not qualify when they have received the statutory maximum amount of 28 weeks, when they are receiving Statutory Maternity Pay or Allowance, where they are off work for a pregnancy-related illness in the four weeks before the weekends when the baby is due, when they have taken three years or more of linked periods of sickness, where they are working outside the EU and are not liable for national contributions, where they are off work in a trade dispute before the first day of sickness, where they have received Employment Support Allowance within 12 weeks of returning to work.
An employee must advise the employer within seven days or the contractual period provided. After seven days, the employer can require a fit note from the doctor. This is to certify the incapacity and illness.
The National Insurance Contribution office of HMRC determines disputes regarding Statutory Sick Pay. Matters are referred to an officer of the Board for determination. An individual may complain with the Industrial Tribunal.
The Court of Appeal had ruled that agency workers did not qualify where their contracts were for three months or less. Legislation reversed this in 2008.
The day on which the illness has occurred must be within a period of incapacity for work. The person must be incapable of doing the job because of sickness or disability or inability to attend work due to the public health legislation on infectious diseases.
Periods of incapacity that are less than eight weeks apart are counted as a single period of incapacity.
Statutory Sick Pay is paid for qualifying days when a person would normally have been required to be available for work under the terms of the contract of employment. Where the work pattern varies, the employer and employee can agree which days are qualifying days. There must be at least one qualifying day in each week.
If an agreement is not reached as to the qualifying days, they are the days that the contract would have required the person to work when ill. Statutory Sick Pay is a flat-rate benefit with no additions for dependents. It is subject to tax and national insurance. It shall be paid in the same way as wages and salaries.
The employer can provide for the manner in which notice of Statutory Sick Pay is to be given. The employer must take reasonable steps to ensure that the manner of notification is known to the employee. The default time limit is seven days.
The HMRC has published guidelines on notification rules. They may not require it to be given personally. Self-certification is sufficient in the first seven days.
Where the contract provides for a higher rate of Statutory Pay, the employer may require compliance with the contractual requirements in respect thereof.
The employer’s time limit or the seven-day limit can be extended to one month, and the Statutory Sick Pay can be payable if the employer accepts there is a good reason for delay in notification. If it is not practicable for the employee to give notification within a one-month period, the period can be extended up to 91 days.
If an employer does not accept that the employee is genuinely ill, he may be obliged to give written reasons for this belief. A dispute may be referred for decision by HMRC. Both parties are asked to make comments. The employee will generally be required to furnish medical records. There is no oral hearing.
An appeal may be heard by an Appeals Commissioner within 30 days of HMRC’s decision.
Because SSP is treated as wages, the general provisions applicable to wages and deductions apply. A complaint may be made to any Industrial Tribunal for failure to pay. This may be based on breach of contract, where it is the contractual term of employment. Such cases can be brought in the County Court or Industrial Tribunal.
A person who brings proceedings or alleges infringement of an employer’s Statutory Sick Pay obligations and who is dismissed for this reason will generally be deemed unfairly dismissed.
An occupational sick pay scheme will count towards statutory entitlement. If there is a shortfall, it must be made up by way of Statutory Sick Pay so the full minimum is paid, at least.
Statutory Sick Pay is not payable when a person is in receipt of Contribution-based Jobseeker’s Allowance, Statutory Maternity Pay, Maternity Allowance, Statutory Paternity Pay, Statutory Adoption Pay.
Statutory Sick Pay may be topped up by Income Support, Pension Credit, and/or Housing Benefit.
At the determination of entitlement to Statutory Sick Pay, if the person is still incapable of work, he may be able to qualify for ESA. ESA replaced Incapacity Benefit and Income Support for most new claims after October 2008.