Contractual sick pay
[ch 6: page 94]Employers must provide their employees with details of their sick pay entitlement as part of their written statement of particulars, in accordance with sections 1 and 2 of the Employment Rights Act 1996 (ERA), within two months of the start of employment.
The sick pay provisions do not have to be set out in the contract of employment itself. They can be set out in a separate document, but the employee must have the opportunity to read it at work, and the employer must have referred them to it.
If there is no written employment contract document and the contractual entitlement to sick pay is disputed, a tribunal will have to work out the contract term by examining all the circumstances, including the parties’ past conduct (for example, if the employee had always received full sick pay in the past) and any documents or discussions.
Sometimes sick pay is discretionary but, if so, the employer must not exercise that discretion arbitrarily or inconsistently, or be “irrational or perverse” (Commerzbank v Keen [2007] IRLR 132 CA).