Occupational sick pay

Occupational sick pay is usually a contractual term (see page 44) and the employer is free to set its own rules, preferably through collective bargaining with recognised trade unions, provided that it is at least as good as the SSP scheme.

It should be legally enforceable as part of a worker’s contract as long as they follow the rules. It may be conditional on absence management procedures being followed (for example, rules on notification etc) or the employee agreeing to a medical examination by a company doctor (Stirling & Mair v Meikle EAT/27/02).

As payment during sickness absence can be a contentious issue and have a big impact on an employee’s income it is a good idea for members to keep their prescriptions; a record of their absence; GP appointments, Fit Notes or Fit for Work reports; and conversations with managers or human resources (HR) about sick pay. If possible they could use email or follow up any conversations with an email recording what was said.

The key variables in setting an occupational sick pay policy are likely to be:

• Is the employer willing to go beyond SSP and pay something closer to regular earnings? In some sectors that is the norm, in others the norm can be SSP only.

• What proportion of regular pay will be payable? Full pay is common but some employers, typically in the public sector, reduce that to half pay or half pay plus SSP for a period.

• What counts towards sick pay? Does the definition include shift premia, overtime or any other regular pay additions.

• What does sick pay count towards, for example, pensionable pay?

• Are there any “waiting days” (as under the SSP scheme) before occupational sick pay becomes payable? What are the rules if an employee comes back to work and then goes off again shortly afterwards for the same reason?

• What is the minimum qualifying service before some occupational sick pay entitlement exists?

• For how many weeks can an employee claim occupational sick pay before it is exhausted (see table, page 54) leaving them to rely on SSP or ESA? Does that increase with service (often the case); if so, how many “steps” are there to full entitlement; and is there discretion for the employer to extend the payment of sick pay?

• Under what circumstances, if any, can the employer suspend or stop the payment of occupational sick pay?

• Does the employer “outsource” its sick pay provision to an insurance company (absence management functions are sometimes outsourced too)?

• Separately from the sick pay scheme, is there any form of incentive award for certain levels of attendance (for example, an “attendance allowance”, see page 46) and under what rules?