Sickness and sick pay are often difficult issues to deal with within the workplace. In this series of three articles, Simren Savjani and the other team members at Jones Chase explain some critical things for employers and employees to understand when dealing with sickness in the workplace. This first article deals with the concept of sick pay.
What is SSP?
Statutory sick pay (SSP) is a payment made by employers to qualifying employees who are away from work due to sickness for four or more days in a row, including weekends and holidays. SSP is not payable for the first three days in any period of sickness absence but after this it is payable for up to 28 weeks at a weekly rate subject to current limits.
The SSP scheme is set out in part XI of the Social Security Contributions and Benefits Act 1992. The amount of SSP available rises every April in line with an annual increase in Consumer Price Index. The weekly rate from 6 April 2024 is £116.75 but is usually worked out daily. SSP is available to ‘employees’ which, for the purposes of SSP, includes all those whose earnings are liable for Class 1 National Insurance contributions (NICs). SSP is not payable to employees who have not yet commenced work, employees who have already received their full 28 weeks’ entitlement to SSP or who have been on linked periods of incapacity for work for more than 3 years. There is no age limit on claiming SSP.
How to claim SSP?
To receive SSP, an employee must:
- Notify their employer of their absence;
- Submit evidence of incapacity as agreed with their employer; and
- Otherwise comply with their employer’s sickness absence policy.
Notify their employer of their absence
Under statute an employee must inform their employer of any date on which they are unfit for work within 7 calendar days of that date. If an employee does this more than 7 days after the first day of incapacity and the employer does not accept that there was a good cause for delay, the employer is entitled to withhold SSP for the duration of any such delay.
Often an employee’s contract of employment will specify more onerous (but not unreasonable) notification requirements, such as requiring staff to report their sickness absence by 9:30am on the first day of their absence and after this at regular intervals. Although these contractual notification periods do not override the statutory scheme for SSP purposes they may be used as a condition of contractual sick pay schemes which some employers will offer employees on top of SSP or form the basis of disciplinary action for unauthorised absence if the employee does not conform to them. We will come onto contractual sick pay later.
A day of incapacity for work
For the purposes of SSP, a day of incapacity is defined as:
“A day on which the employee concerned is, or is deemed in accordance with regulations to be, incapable by reason of some specific disease or bodily or mental disablement of doing work which he can reasonably be expected to do under that contract”. (Section 151(4), Social Security Contributions and Benefits Act 1992 1992.)
Employers do not generally require this precise definition to be fulfilled, as incapacity for work is generally understood to mean an employee being unfit, through illness or injury, to perform their duties.
Deemed incapacity
A person who is not actually incapable of work which they could reasonably be expected to do under their contract might still be deemed to be incapable of that work for any day on which:
- They do not work due to being under medical care in respect of a disease or disablement and a registered medical practitioner has confirmed that, for precautionary or convalescent reasons resulting from that disease or disablement, they should refrain from working.
- They do not work following a request or notice in writing made under an enactment (or have been otherwise prevented from working pursuant to an enactment) because it is known or reasonably suspected that they are suffering from an infectious disease or contamination.
(Regulation 2(1)(a) and (b), SSP Regulations 1982.)
In other words, a fit note from a doctor stating that the employee should refrain from work for a certain period, either as a precaution or to help their recovery, is enough to deem that employee “incapable” during that timeframe for SSP purposes. This also means that, where a doctor has written a fit note recommending a phased return to work, the days where the employee is not working are likely to be treated as days of deemed “incapacity”.
Submit evidence of incapacity as agreed with their employer
An employee must provide their employer with evidence of their incapacity to work. Usually this consists of a ‘self-certification’ for absence of 7 calendar days or less, which is a signed statement from the employee explaining the dates and brief description of their incapacity. Often an HMRC Form SC2 is used and/or a doctor’s certificate for a longer period of absence. These are now commonly known as “fit notes” or a “Statement of Fitness for work.”
It is up to the employer to decide what medical evidence they require from their employees at a particular stage, although for the purposes of administering SSP they are not entitled to insist on a doctor’s note for at least the first 7 days. However, after this initial period they are entitled to insist on a statutory fit note or other reasonable evidence.
Withholding SSP
If an employee has failed to comply with the requirements set out in the company’s sickness procedure it is common for employers to consider withholding sick pay from them. This may also be the case where an employer suspects that an employee is abusing the system by taking excessive sick leave or by taking sick leave for an ulterior motive when they are not genuinely unfit for work, for example taking half a day sick leave every Friday over a course of months.
However, employers are not allowed to withhold SSP for late receipt of medical evidence, only for late notification of illness. If an employer makes the decision to stop paying SSP to an employee, whether before or after receiving medical advice, HMRC states that the employer is required to explain their decision in writing to them by way of a written statement. The employee can then seek a formal decision on their entitlement to SSP from the HMRC Statutory Disputes Payment Team.
Contractual sick pay
Section 1 of the Employment Rights Act 1996 (ERA 1996) requires employers to provide particulars of “any terms and conditions relating to incapacity to work due to sickness or injury, including any provision for sick pay.” Employers can mention this in a written statement within the employee’s contract of employment or the statement can refer to “the provisions of some other document which is reasonably accessible to the worker” such as a sickness policy within a staff handbook.
Generally, we would suggest that employers do have a separate sickness policy, regardless of the size of the company, to ensure there is an effective policy in place which will help both parties be aware of their rights and any procedures that need to be followed. It will enable employers to deal with absences consistently and effectively as well as informing employees as to the standards of attendance and reporting that the employer expects from them, which in turn will help reduce legal risk.
Any ‘contractual sick pay’ paid to an employee shall go towards discharging the employee’s SSP liability in respect of that day and vice versa. This means that, where a company has a contractual sick pay scheme the employee is not entitled to SSP on top of contractual renumeration, the SSP will be included within the contractual sick pay.
Contractual sick pay includes anything that counts as ‘earnings’ (regulation 17 and 18, SSP regulations.) This may include statutory holiday while on long term sick leave, which we have written a separate article on here https://joneschase.com/2024/06/dealing-with-sickness-the-tricky-issues-part-3/
The forthcoming second article in this series of articles contains practical tips for employers. It will discuss contractual sick pay in more detail and what clauses employers should include in a sickness policy as well as withholding contractual sick pay and much more.
Jones Chase is a specialist employment law firm based in the centre of London with an excellent track record of looking after those that we assist. We achieve fantastic results for our clients and make a difference. We have a wealth of experience working with a variety of companies of different sizes and at different stages of growth, ranging from PLCs to a multitude of SMEs. We also assist national brands in a range of sectors. Please get in touch to discuss your needs. We look forward to working with you.
This article was written by Simren Savjani with assistance from Dean Jones, Harriet Bowtell and Liza Knight.