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Occupational sick pay
An employer may provide an occupational sick pay scheme. This must pay at least the SSP rate. As this is a contractual term, the employer is allowed to set its own rules. For example, an employer can make payment of contractual sick pay conditional on an employee consenting to a medical examination by a company doctor (Stirling & Mair v Meikle EAT/27/02).
However, an employer’s failure to follow its own rules may well be a breach of contract and an unlawful deduction from wages (see Chapter 4).
UNISON action defeats NHS sickness absence pay cut
In February 2012, health workers’ union UNISON defeated a move by Central Manchester University Foundation Trust to cut staff pay if they took too much sick leave, by supporting multiple individual employment tribunal claims.
The Trust had introduced a new rule that employees who were sick on four or more occasions a year or 18 days would be penalised by losing their incremental pay rise. As UNISON pointed out, “the nature of working in a hospital, surrounded by ill people, means you are more likely than in other jobs to become unwell”. The tribunal agreed that the new Incremental Pay Progression Policy was a breach of contract and the Trust withdrew it.
Bent and others v Central Manchester University Hospitals NHS Foundation Trust ET/2400833/11An employer does not need employees’ consent to make changes to a non-contractual sickness absence procedure. However, a failure to consult (individually or collectively) on proposed changes will help to support an argument that any resulting dismissal is unfair.
In Roberts v the Governing Body of Whitecross School ([2012] UKEAT/0070/12/ZT), an employer committed a fundamental breach of contract by intentionally failing to pay an employee the full amount of their sick pay when due. It made no difference that the school made an honest mistake in interpreting the collective agreement that contained the contract term.
In this case, the employee was off sick with stress and depression and the school paid only half pay instead of full contractual pay, wrongly believing that the relevant clause of the agreement — the Burgundy book — covered only physical and not mental injury:
The Burgundy Book says that when an absence is due to an accident, injury or assault that a medical practitioner certifies to have arisen out of and in the course of a teacher’s employment, including extra-curricular and voluntary activities, the absent teacher is entitled to up to six months’ sick pay at full pay.