When an employee is off sick during their notice period, many employers are unsure whether they should continue paying full salary, statutory sick pay (SSP), or some other amount. The answer depends on several factors, including the employee's contractual entitlements, and the length of the notice period.
This article provides a brief overview of the key rules under UK employment law.
Why Sick Pay During Notice Can Be Different
Ordinarily, an employee who is absent due to illness may be entitled to SSP and, where applicable, contractual sick pay under their employment contract.
However, special rules can apply when an employee is serving notice to terminate their employment. In some circumstances, employees may be entitled to receive their normal full pay during the notice period even if they are absent due to sickness. This will depend on the notice requirements outlined in the employee’s contract of employment.
Statutory Notice and Full Pay Protection
The key protection is outlined in the Employment Rights Act 1996. The rules are often misunderstood and are a lesser known quirk of employment law.
The key is whether the notice (required to be given by the employer, irrespective of whether or not notice was actually given by the employer) mirrors the statutory minimum notice or whether this is at least one week more than the minimum notice.
The statutory minimum notice that an employer must provide is:
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One week's notice after one month of service.
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One additional week for each complete year of service.
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Up to a maximum of 12 weeks.
When Does the Right to Full Pay Apply?
Importantly, the protection to be paid full pay for the notice period when on sick leave generally applies only where the contractual notice period is not at least one week longer than the employee's statutory minimum notice entitlement.
Where the contractual notice period exceeds the statutory minimum by one week or more, the employee's entitlement during sickness will be governed by the contract instead. This could mean that the employer only need to pay the employee SSP for their notice instead of full pay. However, contractual sick pay provisions still apply.
Contractual Sick Pay Still Matters
Employers should always review:
Many contracts provide enhanced sick pay arrangements which may exceed SSP. These contractual rights may continue to apply during the notice period depending on the circumstances and what entitlement the employee has already exhausted prior to their notice commencing.
Common Employer Mistakes
Employers frequently encounter difficulties where they:
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Assume SSP is always sufficient during sickness absence.
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Fail to consider the statutory notice pay provisions.
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Overlook the distinction between statutory and contractual notice.
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Make deductions from final salary without checking legal entitlement.
Incorrect payments can lead to claims for unlawful deduction from wages and, in some cases, breach of contract.
Practical Steps for Employers
Before processing pay for an employee who is off sick during their notice period, employers should:
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Calculate the employee's statutory notice entitlement.
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Review the contractual notice provisions.
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Check any contractual sick pay entitlement.
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Assess whether the statutory notice pay protection applies.
Need Advice on Notice Pay and Sickness Absence?
The interaction between sick leave, notice periods and final salary payments can be complex. A careful review of the employment contract and statutory notice provisions is often required to determine the correct payment position.
If you are dealing with an employee who is absent due to illness during their notice period, obtaining specialist employment law advice can help reduce the risk of wage claims and ensure compliance with UK employment law.
Contact us for further support or information.
