Value of occupational sick pay

Most occupational sick pay schemes in LRD‘s Payline database go beyond SSP and many offer 100% pay (including SSP entitlement) at the start of a period of absence although some offer less. A harmonisation exercise covering different staff groups at construction equipment manufacturer JCB will see sick pay set at 80% and then, over time, at 95%.

It is quite common, particularly in the public sector, for this to drop to 50% (often with SSP on top) during the second half of the absence, in effect offering a two-tier entitlement. It does mean that absent workers are financially worse off on a week-by-week basis but that may be offset by the fact that paid leave lasts longer.

For workers whose regular pay includes amounts other than basic pay or salary, what counts towards occupational sick pay could be very significant. Taking shift pay into account for the calculation of sick pay can help stabilise earnings for workers on unsocial hours, for example. The sick pay scheme at Asda Distribution, negotiated by the GMB union, pays the hourly rate that an individual would normally have received for their contractual working week, as well as any allowances normally paid such as shift premiums.

Changes introduced into NHS Agenda for Change in England in 2013 (and more recently in Wales) mean that sick pay is now payable at basic salary level (plus high cost area supplements). It no longer includes allowances or payments linked to working patterns or additional work commitments (the lowest paid on spine points 1-8 were excluded from that change, as were absences due to a work-related injury or disease).

However, the approach threatened to slash incomes in the ambulance service and led to industrial action ballots by the GMB, UNISON and Unite. Following a wider pay dispute in 2014 the settlement reached in early 2015 remitted the issue of sick pay in the ambulance service to wider talks on pay and conditions.

What sick pay counts towards can also be relevant. Under the pensions auto-enrolment scheme, minimum contributions made by the employer and member are based on “qualifying earnings” that must include statutory sick pay (SSP) as well as salary/wages and a range of other pay elements. This may well be different from the concept of “pensionable earnings” used by many workplace pension schemes.