Sick Pay Clauses in Employment Contracts

Employment contracts should clearly state sick pay entitlements, whether statutory minimum only or enhanced company sick pay.

Statutory Sick Pay (SSP)

Legal Minimum

All eligible employees are entitled to:

• £116.75 per week (2024-25 rate)
• Paid for up to 28 weeks
• After 3 waiting days

Eligibility for SSP

Employees must:

• Earn at least £123 per week average
• Be off sick for 4+ consecutive days
• Notify the employer correctly
• Provide proof of illness if required

Company Sick Pay (CSP)

Enhanced Sick Pay

Many employers offer more generous terms:

"Subject to compliance with the Company's absence management policy, you will receive company sick pay as follows:

• During first year: SSP only
• After 1 year: 4 weeks full pay, 4 weeks half pay
• After 5 years: 8 weeks full pay, 8 weeks half pay"

Full Pay Definition

"Full pay means your normal basic salary including any contractual allowances. It does not include overtime, commission, or discretionary payments."

Sick Pay Clause Structure

Entitlement Clause

"Provided you comply with the Company's sickness absence procedures, you will be entitled to company sick pay in accordance with the following scale:

Service	Full Pay	Half Pay
Under 1 year	2 weeks	2 weeks
1-3 years	4 weeks	4 weeks
3-5 years	8 weeks	8 weeks
5+ years	12 weeks	12 weeks

Company sick pay includes any SSP due. Entitlements are per rolling 12-month period."

Conditions for Payment

"Company sick pay is conditional upon:

• Notifying your manager by [time] on the first day of absence
• Completing a self-certification form for absences of 1-7 days
• Providing a fit note from your GP for absences exceeding 7 days
• Attending occupational health appointments if requested
• Complying with the absence management policy"

Discretionary Withdrawal

"The Company reserves the right to withhold or recover company sick pay if:

• The absence results from your own misconduct
• You fail to follow the absence reporting procedures
• You undertake paid or unpaid work during sick leave
• You fail to attend occupational health appointments
• You are subsequently found to have been fit for work"

SSP-Only Clause

For employers offering only statutory minimum:

"You are entitled to Statutory Sick Pay (SSP) subject to meeting eligibility requirements. The Company does not operate a company sick pay scheme. Current SSP rates are available from Gov.uk."

Fit Notes and Evidence

Requirements

"For absences exceeding 7 calendar days, you must provide a fit note from your GP. Failure to provide evidence may result in sick pay being withheld."

Fit for Some Work

"If a fit note indicates you may be fit for work with modifications, the Company will consider what adjustments can be made and discuss these with you."

Withholding Sick Pay

Legitimate Reasons

Company sick pay (not SSP) can be withheld for:

• Failure to follow absence procedures
• Illness caused by misconduct
• Working elsewhere while sick
• Providing false information
• Refusing reasonable medical examination

SSP Cannot Be Withheld

SSP must be paid if the employee meets eligibility requirements, regardless of other factors.

Relationship with Other Leave

Sick During Holiday

"If you are sick during pre-booked annual leave, you may reclaim those days as sick leave provided you:

• Notify the Company as soon as possible
• Provide a fit note covering the absence
• Request in writing to reclaim the holiday days"

Sick During Notice Period

Employees remain entitled to sick pay during notice period. However:

• Cannot extend notice period
• Pay continues as if working
• Garden leave provisions may apply

Long-Term Absence

Exhausted Entitlement

"When company sick pay is exhausted, you will continue to receive SSP if eligible, or nil pay if SSP eligibility has also ended."

Permanent Health Insurance

Some employers provide PHI:

"After 26 weeks of continuous absence, you may be eligible for benefits under the Company's Permanent Health Insurance scheme, subject to the policy terms."

Tax Treatment

• SSP: Taxable as normal earnings
• Company sick pay: Taxable as normal earnings
• PHI benefits: Tax-free if employee pays premiums; taxable if employer pays

Best Practice

For Employers

1. Have clear written policy
2. Apply consistently to all employees
3. Train managers on procedures
4. Keep accurate absence records
5. Consider return-to-work interviews
6. Use occupational health appropriately

For Employees

1. Know your entitlements
2. Follow notification procedures
3. Keep copies of fit notes
4. Communicate about return to work
5. Consider phased return if appropriate