Letter notifying reversion to SSP

Under the terms of your employees’ contracts of employment, you may provide that employees will get statutory sick pay (SSP) only in the event of sickness absence. Alternatively, you may have a discretionary or contractual sick pay scheme. In these cases, during long-term sickness absence there may come a point when you need to revert to paying SSP only. Use our letter notifying reversion to SSP to implement this.

Contractual or discretionary

Most employers pay some level of discretionary or contractual sick pay which is over and above SSP entitlements. When considering what to pay an employee during sickness absence, the starting point is to always look at what their contract of employment says. This may provide that any payment over and above SSP is at the absolute discretion of the company. Alternatively, it may provide for such a discretion but with parameters, i.e. the maximum amounts you will pay and a limit to the duration of sick pay. Another possibility is that the sick pay scheme is contractual, i.e. that the employee will be paid full pay (or a specified percentage of full pay) for X number of weeks of sickness absence and there is no employer discretion here. Where a sick pay scheme is expressed to be discretionary, you must exercise your discretion fairly and not arbitrarily, irrationally or capriciously. In particular, you need to ensure consistency between cases and that you do not discriminate against a particular employee because of disability or pregnancy. There is also a risk that if, in practice, you ignore your discretion and always pay full pay to an employee when they are absent due to sickness, an employment tribunal will say that your discretion has, in fact, become a contractual term because of your ongoing custom and practice. This will then make it difficult to revert back to paying SSP only to employees in future. Thus, when an employee is off sick, always positively address the exercise of your discretion. If a contractual sick pay scheme is provided for employees, it is legally binding. This means that a failure to make a payment in accordance with the rules of the scheme will amount to a breach of contract and it may also entitle the employee to resign and claim constructive unfair dismissal. An employee can generally claim constructive dismissal if they have been employed for two years or more.

Reversion to SSP

Once you’ve familiarised yourself with the rules of your sick pay scheme, in accordance with those rules you can then use our letter to notify an employee that they will revert to SSP only from a specified date. Our letter refers to the terms of the employee’s contract of employment, sets out how many days of sickness absence they have had in the last twelve months and then confirms that, as a result, further sickness absence will be at SSP rates only. Always make sure you are complying with your sick pay scheme and that you can justify any exercise of your discretion. However, if all you ever pay during sickness absence is SSP only, and this is backed up by your contractual provisions, then you won’t need to use our letter. You just need to ensure compliance with the SSP rules.