Drafting a sickness absence and sick pay clause
Drafting a sickness absence and sick pay clause
You are required to include any terms and conditions relating to incapacity for work due to sickness or injury, including sick pay provision, in employment contracts. What should you cover in a sickness absence and sick pay clause?
Legal requirements
Although the Employment Rights Act 1996 requires you to include any terms and conditions relating to incapacity for work due to sickness or injury, including any provision for sick pay, in the written statement of employment particulars (or employment contract), you can alternatively make reference in the written statement to the information being contained in another "reasonably accessible" document, e.g. a sickness absence policy in a staff handbook.
What to include about sickness absence
Ensure your clause clearly covers: (1) the reporting requirements for sickness absence, i.e. who the employee must notify, how they must notify and by when, what information they must provide and whether daily updates are required for short-term absences; and (2) the evidence requirements, i.e. a self-certificate for the first seven calendar days of sickness absence and then statements of fitness for work (fit notes) from the eighth day of absence onwards. You could also include a consent to medical examination by a doctor nominated by you, or you could put that in a separate clause.
Trap. Don't accept text message or email as a valid notification mechanism as that makes it easier for employees to take sickies; insist on a telephone call from the employee personally.
Tip. You might want to reserve the right to request a fit note earlier, but you would need to exercise this reasonably, e.g. where the employee has taken an excessive number of short-term absences, and you will need to pay for it if you have requested it to cover a period before the eighth day of absence.
Tip. State that entitlement to sick pay is subject to compliance with reporting/evidence requirements.
What to include about sick pay
If you pay only statutory sick pay (SSP), you don't need to set out in detail the provisions of the SSP scheme. It will suffice to simply say you pay SSP in accordance with the appropriate legislation.
If you offer enhanced sick pay, spell out: (1) whether it's contractual (in which case, it's an entitlement) or discretionary (in which case, any discretion must be exercised fairly and consistently and not irrationally or arbitrarily); (2) whether it includes any SSP that may be due; (3) how much will be paid and for how long, e.g. six weeks at full basic pay and then six weeks at half pay in any rolling twelve-month period; and (4) any circumstances when enhanced sick pay won't be paid, e.g. where disciplinary action is pending against the employee, and/or any conditions attached to payment, e.g. it's only available once the employee has passed their probationary period.
Tip. If sick pay over and above SSP is discretionary, make this very clear and always consider the exercise of your discretion each time. There is still a risk though that it could harden into a contractual entitlement through custom and practice.
Tip. If you also have a sickness absence policy which contains additional or more detailed provisions, cross-refer to it in your clause and ensure there's no conflict between the two documents.
Key areas to cover in your clause are the absence reporting procedure and evidence requirements, and what your provisions are for sick pay, e.g. SSP only, a discretionary enhanced sick pay scheme or contractual enhanced sick pay. A robust clause will ensure that your employees are clear about what's required of them and what they will be paid.