Unlawful pay deductions aren’t the only problem – there are problematic lawful ones as well

We all get ill from time to time. Sometimes we just need one or two days off work to recover from a cold. Other times things are more serious and we need rather longer periods away from work. What we have in common is a need for financial security during such periods of absence.

One of the most significant employment-related improvements that occurred during the post-war period was the expansion of occupational sick pay schemes that provided staff with income during periods of sickness absence. Indeed, statistics suggest that by the end of the 1980s around 90% of employers offered at least some of their staff access to sick pay. Since then, however, the evidence suggests that this percentage has declined significantly.  The latest available figures indicate that less than half of employers (and a much small proportion of private sector ones) now operate such schemes. Or to put it another way, indicate that most employers (perfectly lawfully) deduct a significant proportion of pay from sick, absent staff.

Against this backcloth, available figures further suggest that around 30% of employees, as well as those many, many workers working casually and in various forms of false self-employment, do not have access to sick pay. These are potentially entitled instead to Statutory Sick Pay (SSP). This is only the case though if they are paid at least the National Insurance threshold of £113 a week. Furthermore, if this threshold is passed, employees only receive £89.35 a week from the fourth day of absence up to a maximum of 28 weeks. For somebody who normally work 35 hours on the adult National Minimum Wage, this means that they will only have around a third of their normal income replaced while on SSP. It also means that non-employees have no entitlement and hence can effectively lose all their pay.

The recent Taylor review of modern working practices, in its (surely) ironically entitled report Good Work, recommended that the Government reform SSP to make it payable to all ‘workers’, regardless of their income from their first day of absence. Amazingly, however, this expansion of coverage was recommended alongside the further proposal that the entitlement to receive it for up to six months be ‘accrued on length of service’.  Equally amazingly, and notwithstanding the review’s claimed focus on providing fair and decent work for all, nothing was said about the loss of pay likely to be experienced by many of those receiving SSP. Nor was anything said about the current gross disparities that exist in current sick pay arrangements which mean that some employees receive no pay when absent, while others receive six months on full pay and a further six months on half-pay. Silences which suggests that very strange notions of fairness and decency were being applied.

Arrangements to provide income to sick workers vary widely across developed economies. In some countries, employers are responsible for its provision. In others, payments form part of the social security system. In yet others, a combination of these two approaches are in place. What is clear, however, is that the arrangements in the UK are among the least generous in the developed world. For example, in one study only New Zealand and the United States were found to possess less generous ones[i].

It is then clearly far from impossible for a modern advanced economy to treat ill, absent workers with more decency and respect than is the case in the UK. Obviously, there is much scope for debate about how the present situation in the country could be improved. A valuable starting point though would be to accord greater recognition to its grossly unfair and unsatisfactory nature. After all, it is surely simply wrong that over half of employers can lawfully deduct pay from staff on the grounds that they are unable to attend work due to illness


[i] Heymann, J., Hye, R., Schmitt, J and Earle, A. 2010. ‘Ensuring a healthy and productive workforce: comparing the generosity of paid sick day and sick leave policies in 22 countries’, International Journal of Health Services, 40(1), 1-22


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