SICKNESS ABSENCE - 30.04.2009

Claiming sick pay instead of holiday pay

Trying it on

You’re probably all too aware that employees will sometimes feign the odd day of illness when they’re not really sick. This is a particular risk if you pay them more than Statutory Sick Pay (SSP), e.g. full pay or reduced pay, for any periods of sickness absence, as they won’t lose all their pay whilst they’re off.

Boosting holiday entitlement

But let’s suppose that one of your employees has booked some annual leave, say two weeks; and told you that they will be going away on holiday. However, the day before it’s due to start they claim to be ill. To support this, they produce a sick note from their GP, which signs them off for a period that covers most, or all, of their pre-booked holiday. As this is all rather convenient, you don’t believe their illness is genuine.

Nice little earner

The idea behind the employee’s trick is that you’ll pay them sick pay and re-credit them with the equivalent amount of annual leave. In most cases, the employee will still go on their holiday, but because they’re now “sick” they have additional time to take at another point in the year. And by doing this, they’re not the one out of pocket. So if you’re in this position what can you do?

Must you pay?

The good news is that you have considerable discretion in how you operate your sick pay scheme. This is because there’s no legal requirement for you to even have one. So as long as you don’t use it in a discriminatory manner, you can decide on the type of absence that you will cover, the level of pay and its duration. So in our example, you could actually refuse to allow the employee to take the time as sickness absence and insist they take it as annual leave.

Tip 1. Whilst it may seem tough the first time you do this, it will send out a clear message to the rest of your workforce not to try a similar tactic.

Tip 2. If the employee later provides hard evidence that they weren’t able to take some or all of their holiday, e.g. they were in hospital, you can use your discretion and allow them to take the time as sickness absence, i.e. re-credit them with their annual leave entitlement.

Statutory Sick Pay

Even if you decide not to allow sick pay, there’s nothing to stop the employee claiming SSP. The test for payment is that they’re “incapable of work”. By providing a sick note they meet the test. But the usual rules apply and entitlement won’t start until the fourth consecutive day of absence.

Tip. On April 5 2009 the weekly rate of SSP was increased to £79.15. So make sure you’re paying the right amount from that date.

Covering all bases

Amend your sickness absence policy to make it clear when you won’t substitute paid annual leave with sick pay, e.g. if the sickness absence occurs on the day of the holiday or immediately before it.

For a free sample sickness absence policy, visit http://personnel.indicator.co.uk (PS 11.09.05).