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Statutory Sick Pay: Reclamation Cessation

As of 6 April 2014 employers will no longer be able to claim back the last remaining subsidy for the Statutory Sick Pay (SSP) of employees.

When speaking to the average citizen about SSP over the years, the abiding belief has more or less always been that SSP is either partly or fully paid by the Government. Employers and Employment Lawyers of course know that this is simply not true and that the now defunct Percentage Threshold Scheme (PTS) only came into play when an employer’s liability for SSP in a certain month was more than 13% of its National Insurance contributions for the same period.

It may then come as a somewhat belated surprise to the public that not only did the previous system only apply in limited circumstances but has now been scrapped altogether. The motivation for doing away with the PTS appears to be monetary; a saving of £50m per annum to Joe and Jane Taxpayer. Although the Government also accuses employers of being to laid-back when dealing with long-term sick employees, arguing somewhat unconvincingly that as it was part funding the SSP that employers were therefore in less of a hurry to get their absent workers back on the job.

The Government has however sought to justify the cut by putting the money saved towards the cost of a new Health and Work Service (HWS), which will save employers money by helping get sick employees back to work by offering a free Occupational Health service to employers.

There does however appear to be a gap between the removal of the PTS and the introduction of this new service, the PTS being scrapped on 6 April and the service not likely to be up and running until April 2015 at the earliest.

Good news for employers then? Perhaps not quite. Not only are they now going to foot their entire SSP bill each month, but the side effect of a nationally available, free Occupational Health service is that it may create an additional hurdle for employers when considering dismissal of an employee on ill health capability grounds. If an employer dismisses an employee absent having made a referral to the HWS, would the dismissal still be considered reasonable on the basis that the employer had proceeded with the limited information it had before it?

One would imagine that we can look forward to some test cases on that very point next year.


Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with us or other professional counsel before acting on the information contained here.

Samira Cakali

Samira Cakali is a pragmatic and approachable solicitor advocate with extensive contentious and non-contentious experience in the fields of employment law as well as civil litigation, within a range of commercial businesses from SME’s to multinationals as well as senior executives.

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