Statutory Sick Pay

An employer has an obligation to provide the statutory level of sick pay (SSP) for periods of incapacity of four or more days, for a maximum period of 28 weeks. The current rate of SSP is £95.85 per week. An employer may not modify, limit or exclude these statutory payments and SSP cannot be recovered in by an employer any circumstances, except in an insolvency situation. Comprehensive information on Statutory Sick Pay, including a SSP calculator, can be found at the Government's website.

Company sick pay - Discretionary Payments

Although an employer has no obligation to pay more than Statutory Sick Pay, many organisations will offer a limited period of sickness absence at full pay. Typically, such schemes will make such payments either 'solely at the Company's discretion' or be offered as a time-limited contractual benefit with the possibility of the Company exercising its discretion to extend sick pay beyond the contractual entitlement. Extending the period for payment of contractual sick pay can present problems. Employers should consider this carefully before a decision is taken to pay over and above the terms of their sickness policy. Inconsistent exercise of discretion to extend sick pay may be perceived as being unfair or discriminatory by other employees. In addition, if discretion is consistently applied, this consistent application could give rise to a contractual right by virtue of it becoming 'custom and practice'. Research has indicated that attempts to reduce short-term (i.e. single day) sickness absence by not paying employees for single day sickness absences frequently result in an increase in the number of two-day absences. A more successful approach may be to restrict company sick pay to a limited number of periods of sickness (of whatever length) in a twelve month period.

Best practice

It is recommended that an organisation has a sickness absence policy that is both fair and consistent in its treatment of its employees and protects their interests as the employer. This can be achieved in the following way:

  • Conducting return to work interviews with employees after a period of sickness absence to gain an understanding of any recurrent or long-term health issues that may be affecting the employee concerned.  Consideration should be given as to whether any changes need to be made to the employee's job or the working environment to facilitate the performance of their job role and to minimise any adverse impact his or her job duties may have on his or her health;
  • In the case of frequent or long-term absences, requesting a medical report from the employee's GP or consultant, having procured the employee's consent, particularly in the case of employees on long-term sickness. Sample templates of a medical report consent form and a draft letter can be downloaded from this website;
  • Where necessary, requiring the employee to be examined by a medical or occupational health professional appointed by the organisation;
  • The company may also consider withholding sick pay where it appears that, for example, self-induced conditions, such as alcoholism or drug abuse, are the cause of the sickness absence.  However, as drug and alcohol abuse are a health-related issues, Companies have a degree of social responsibility to handle these with sensitivity and should have a drug and alcohol abuse policy.

Disciplinary action

Employers may find it difficult to work out when an employee is genuinely ill or is simply pretending. Careful thought needs to be paid to managing an employee on the basis of incapacity, or subjecting him or her to disciplinary action. Where there is evidence that employees are abusing the system, employers may treat such abuse as a disciplinary matter.

Tips on dealing with unauthorised absence and lateness

  • Ensure absent employees know that they have to notify their supervisor by telephone (not by text message!) by a specified time each day;
  • Ensure reasons for absence or lateness are discussed with the employee upon return to work;
  • Determine whether the content of the job is a contributory factor and review alternatives such as altering the job or providing new duties;
  • Be consistent in undertaking regular monitoring of records, provide counselling or take disciplinary action, as appropriate, after investigation.

The following are important tips in helping organisations to deal with short term sickness:

  • Putting in place rules on the provision of certificates to cover sickness absence;
  • Ensuring supervisors liaise with the employee on return to work;
  • Requiring an employee to consult a doctor where there is no medical evidence to support frequent absences;
  • Including a requirement in contracts of employment that employees notify the Company if there are changes in their health that may adversely affect their job performance;
  • If frequent periods of short-term absence are putting the employee's job at risk, informing the employee that this is the case.

When dealing with long-term sickness, the organisation should:

  • Keep in regular contact with the employee;
  • Invite a medical opinion from the employee's GP, consultant or from an occupational health practitioner;
  • Consider how long the job can be kept open, whether alternative work is available and keep the employee fully informed if his/her job is at risk;
  • Ensure that the employee receives his or her salary throughout the period of notice to which they are entitled or payment in lieu of notice in cases where the employee is dismissed without notice;
  • Consider whether 'reasonable adjustments' can be made to the job or working conditions to facilitate a return to work if the sickness or incapacity qualifies the employee for protection under the Equality Act;
  • Inform the employee of their right to appeal against any dismissal.

Permanent Health Insurance Benefit

It is vital that the employer clearly states the rules for participation under any such scheme as provided by the insurer. Otherwise, the employer could find that it is left with a contractual obligation to provide PHI-equivalent benefits in the event that the insurer declines an application.

Disability Discrimination

Under disability discrimination legislation it is unlawful for an employer to treat a disabled person less favourably, without a justifiable reason. Potential disability discrimination implications are worth taking seriously where employees are on long-term sickness absence if the sickness or incapacity potentially qualifies the employee for protection under the Equality Act.

Employers may be inclined to consider terminating the employment of an individual who is likely to be absent from work because of long-term sickness or incapacity - particularly in instances where the employee has yet to accrue sufficient length of service to be protected by the Employment Rights Act (i.e. 24 months). In such instances the employer should make every effort to identify whether the employee concerned is potentially suffering from what could qualify as a 'disability'. The employer should be seen to consult with the employee, seek a medical report from the employee's GP or consultant, consider changes to job duties that may facilitate an early return to work and, potentially, consult an occupational health specialist. Such an approach will enable the employer to demonstrate that they have explored any potential reasonable adjustments that could be made to enable the employee to return to work and have acted responsibly and fairly.


"There is a word for the absence of stress: death." Hans Selye

There may be the potential for a personal injury claim against the employer if an extended period of absence relates to a stress-induced illness. It may be hard for the employer to prove non-liability if the employee had on previous occasions given ample and clear signs to the employer that this may occur and in circumstances where the employee can clearly demonstrate that he or she has been required to work under unusually high levels of pressure.

A tribunal is likely to consider that all jobs are likely to involve a degree of stress. An inability to cope with a reasonable degree of stress may therefore point to a capability issue if other employees in similar roles cope effectively. In addition, legal precedents have indicated that conditions such as stress do not necessarily constitute a disability within the meaning of the Equality Act. In Sutherland v Hatton [2002] IRLR 263, the court found that there were no special control mechanisms applicable to claims for psychiatric injury at work. An employer that offers confidential access to a confidential helpline or stress counselling service, possibly via an EAP provider is unlikely to be found in breach of duty, unless they had been putting totally unreasonable demands on a worker - and even then only when the risk of psychiatric harm is clear.

Long-term absences from work due to stress should be handled in a similar manner to any other long-term sickness, with adjustments to job duties being considered and discussed with the employee if this will facilitate an early return to work. Ultimately, if termination of employment becomes a necessary option, the process should be relatively risk-free provided that it is fair.

Mental Health

In addition to stress-related health issues, mental health problems suffered by employees can be a challenge for employers to manage correctly.  With it being estimated that one in four adults will experience difficulty with their mental well-being in any 12 month period it is a common issue. The range of potential mental health conditions and disorders is extensive and are defined within DSM-V (ICD-10). These include psychological disorders, personality disorders and psychotic disorders.  Two of the most common mental health issues that employers encounter within their workforce are depression and anxiety disorders. There is a high degree of co-morbidity between depressive disorders and anxiety and at the severe level they can be immensely debilitating for the sufferer. Employees experiencing mental health problems that affect their general well-being, ability to attend and perform at work and their behaviour should be treated with the same degree of sensitivity, compassion and concern as those with more obviously physiological complaints. Those suffering from long-term or recurrent mental health issues that constitute a disability are protected by the Equality Act 2010.

Sex discrimination

Employers should record any pregnancy-related sickness absence independently from other sickness absences. There is no obligation to provide different sick-pay provision or additional entitlement for women absent for pregnancy-related reasons. Nonetheless, there is a commonly held view that an employer may risk a sex discrimination claim if it includes pregnancy-related absences on the employee's sickness record. If this is the case, it raises the question as to whether a male employee suffering from an enlarged prostate could make a similar claim.

Data Protection

Details of an employee's physical or mental health are considered to be ‘sensitive personal data' for the purposes of the Data Protection Act 1998. It is therefore imperative for an employer to seek employees express permission (possibly as a contractual clause) to keep and 'process' such information. Employers who hold sickness records ‘in a reasonable manner' are likely to comply with the Act.

 Many factors affect absence levels and employers should pay special attention to the following to minimise 'sickness' absence:

  • Communications;
  • Working conditions;
  • Induction and training;
  • Career development;
  • Health and safety standards;
  • Welfare;
  • Supervisory training;
  • Job design;
  • Disciplinary rules and standards.