Guide

Understanding statutory sick pay

Contractual issues and dismissal in relation to sick pay and sickness

Whether you pay only statutory sick pay (SSP) or operate an occupational sick pay scheme, you must detail your rules on sick pay in each employee's written statement of employment particulars, or refer them to an accessible and separate document eg company handbook, which gives these details.

You must give a written statement to all employees who work for you for one month or more. Read more on the written statement.

See Labour Relations Agency (LRA) guidance on preparing a written statement of employment.

Precedent in overpayment of SSP

If you (mistakenly) pay more than the SSP rate over a period of time, employees could regard the payments as contractual through 'custom and practice'.

If you then try to reduce payments to the SSP rate, the employee could claim:

  • unlawful deduction of wages
  • breach of contract
  • constructive dismissal - although they would have to resign first

Contact HMRC for further advice on SSP - see Statutory Sick Pay and leave.

Long-term sickness and dismissal

An employee's inability to do their job because of long-term sick leave can be a potentially fair reason for dismissal.

However, in the event of an unfair dismissal complaint, an industrial tribunal will expect you to have acted reasonably by:

  • consulting the employee and finding out as much as possible about their condition and the likely timescale for their recovery
  • seeking medical advice from an Occupational Health Physician or GP
  • considering all the alternatives to dismissal, such as changing the employee's role or hours of work
  • following the statutory procedures in relation to dismissal

However, the tribunal will take into account your business' size when deciding whether a dismissal was reasonable.

See how to manage absence and sickness and find out more about dismissing employees.

You should also establish whether or not the employee is disabled under the Disability Discrimination Act 1995 when considering dismissal on the grounds of long-term sickness. See how to prevent discrimination and value diversity.