Coronavirus and statutory sick pay

Author: Darren Newman

Darren Newman

Consultant editor Darren Newman discusses the changes to the statutory sick pay system brought about by the coronavirus pandemic, and suggests the current crisis may well result in a full review of the system.

The prospect of a significant proportion of the UK workforce having to take sick leave over the coming months has focused attention on statutory sick pay (SSP). The current scheme has been seen as so inadequate that emergency changes have been made and more are in prospect.

The first issue that arose was the Government's advice to individuals who were returning from areas affected by COVID-19 (coronavirus), or who might have had contact with an infected person, to "self-isolate". If someone had to stay away from work as a result would they be entitled to SSP in respect of that absence? The Government seemed to send mixed messages on the issue, but the legislation was quite clear. The Social Security Contributions and Benefits Act 1992 specified that, to qualify for SSP, an employee had to be incapable of work "by reason of some specific disease or bodily or mental disablement". This would not cover someone who had no symptoms of any illness, but who had been advised to self-isolate.

The Government subsequently addressed that problem. The Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2020 (SI 2020/287) came into force on 13 March. They provide that a worker will be deemed to be incapable of work within the meaning of the 1992 Act if they are isolating themselves "so as to prevent infection or contamination with coronavirus disease" in accordance with guidance issued by the NHS and effective on 12 March. However, within days that had to be amended and the reference to 12 March was changed to 16 March to reflect the new advice in relation to isolation. Presumably, further amendments will be made as more guidance is issued. Quite why the Regulations have to refer to a date at all rather than simply to "advice that may be given from time to time" is not clear.

The Government has indicated that it is also going to address the problem of "waiting days". SSP becomes payable only on the fourth day of sickness. There is no pay due for the first three "qualifying days" when the employee is sick. However, the Prime Minister has said that emergency legislation will provide for the payment of SSP from the first day of illness. We do not yet have full details of the legislation and it is not clear when the change will come into force.

Currently an employer can ask employees to produce a fit note from their GP to cover any period of sickness after the first seven days. The Government has already advised employers to waive this requirement in cases of absence related to coronavirus, and an employer cannot require an employee to produce a fit note where it is not reasonable to do so or where information in some other form is "sufficient in the circumstances of any particular case". The Government has nevertheless announced that it will provide a temporary alternative to the fit note - a notification from the NHS 111 service - which can be used as sufficient evidence that the employee qualifies for SSP.

Finally, the Chancellor announced in his Budget that businesses with fewer than 250 employees will be able to recover the amount they spend on up to two weeks of SSP for each employee absent as a result of coronavirus. The details of the refund scheme - including the mechanism that will be used to process the repayment - have yet to be announced, but it will apply in relation to absences from 12 March onwards. Employers should therefore be keeping records of SSP payments that they are making - and will not be required to obtain GP fit notes to get the refund.

This all amounts to a pretty comprehensive overhaul of the SSP system - apart from one significant detail. The amount of SSP is currently £94.25 per week. That is scheduled to rise to £95.85 per week in April. Compare this with the pay of a full-time worker on the adult rate of the national minimum wage (which will be £8.72 from April onwards) who earns around £300 per week. The protection against financial hardship that SSP provides is negligible.

The complexity of the legislation surrounding SSP is out of proportion to the level of the benefit that is provided. The reason for this is straightforward. When it was introduced in 1983, SSP essentially involved making the employer liable for the administration and payment of what was really a state benefit. Employers were reimbursed by the state for the amount they spent on SSP. From 1991 onwards, the extent of that reimbursement was reduced until it was abolished altogether in 2014. Subject to the temporary measures about to be introduced for small and medium-sized businesses, what we are left with is an employment right drafted with all the complexity and detail of a public spending measure.

The coronavirus pandemic has shone a spotlight on just how bureaucratic and inadequate the rules on SSP are. The temporary changes that we have seen so far may well not be the last and the Government might be forced into much bolder steps to address the crisis. However, once the worst has passed, it is difficult to see how the Government could simply return to the old system. It would make much more sense for it to revisit the structure of SSP so that it is drafted like the employment right it really is. There should be no need for complex calculations, waiting days and qualifying days - just a straightforward entitlement for employees to be paid a minimum level of sick pay for a minimum period of weeks in any given year. How much sick pay should be paid and over what duration is of course a political decision. Where should the balance lie between the burdens placed on the business and those placed on the state? Perhaps it would be a percentage of normal earnings and subject to some sort of cap. However, the UK can surely do better than the current system, which provides sick employees with no financial security at all.