A Guide to Sickness Issues and SSP for Business

Improperly managed sickness absence can be a harmful drain on your business. Learn how to limit its impact here

A Guide to Sickness Issues and SSP for Business

Sickness issues normally represent a significant bugbear for firms, especially small ones. Frequently absent employees cost your business time and money, so it is important to put a system in place that limits the impact sickness has on your business. Disciplining or dismissing employees for sickness-related matters is a particularly thorny issue, as you could fall foul of disability discrimination laws.

This article should provide you with a thorough introduction to handling sickness issues at work, including the ins and outs of Statutory Sick Pay (SSP), how to spot suspicious absences, coping with long-term illness, and how to dismiss sick employees safely.

Do I have to pay my employees when they are off sick?

Every employer must pay Statutory Sick Pay (SSP) to those who qualify for it. This is a minimum weekly amount that all ‘qualifying employees’ are entitled to, which must be paid on the first (or the second, at the very latest) pay day after the sick leave was taken.

Employees qualify for sick pay if they earn over the current NI lower earnings limit (£111 a week in 2014/15). This includes all kinds of workers you pay, including agency workers on a fixed-term contract in addition to part-time and temporary staff.

Contrary to what some might believe, employees do not need to work any kind of qualifying length of service or a minimum number of hours per week to qualify.

Like many employers, you might choose to opt out of SSP and implement your own scheme. Remember that the terms must be more generous than SSP, and you must keep detailed records of absences and payments.

What are the key features of SSP?

SSP is relatively easy to understand once you know the basic parameters, and it should be reasonably easy to stay within the law as an employer.

Essentially, SSP requires you to pay an employee a legal minimum rate if they are off sick from work. This is currently set at £87.55 per week (2014/15 tax year). This is payable for a maximum of 28 weeks of any one period of sickness; if one of your employees is about to reach this limit, you need to send them form SSP1 by the end of the 23rd week of absence. This will let them know when payments will be ending.

Employees become entitled to SSP from the fourth ‘qualifying day’ of sickness. A ‘qualifying day’ is one in which your employee would have worked were it not for their illness – so there are normally three days before SSP becomes payable in a single ‘period of incapacity for work’ (PIW). However, if part of a PIW falls on a weekend, bank holiday, or non-working day, it will count towards this four-day PIW. So if an employee falls ill on a weekend and this runs to Monday and Tuesday, they will qualify for SSP on the Wednesday.

The key to staying within the law here is good record-keeping. HMRC issues a standard record sheet, which you should use every time you make SSP payments. You need to keep these records for three years before destroying them, or you could face a £1,000 fine.

You might be aware of a scheme from HMRC where you can reclaim a certain amount of SSP if you have paid out amounts of more than 13% of your NI contributions for the month. This has been abolished from the 6th of April 2014, although for a limited time you can still reclaim SSP from previous tax years.

How should I track sickness absences?

Both to comply with your record-keeping requirements and to keep on top of absences generally, you need to enforce a system of tracking sickness absences.

To do this, follow these steps:

  • Require employees to notify you within a certain time: If employees are sick, tell them they, or someone else, must tell you by telephone within a certain time (for example, by 11am on the first day of sickness).
  • Require employees to fill out a ‘self-certification’ form: This should require them to give a specific description of their ailment (for example, migraines rather than headaches) so you can look at whether there is a pattern. You can either design your own or use the standard SC2 form provided by HMRC.
  • Interview employees who have been off sick for a certain time when they return: Your policy might allow for, say, five days of sickness before an interview is needed. The return-to-work interview should cover the specific causes of the illness and whether you can do anything to alleviate the problem reoccurring in the future. These interviews will also be especially useful for weeding out fraudulent sickness claims.
  • Ask for a ‘fit note’ from a doctor following absences of more than seven days: These will indicate whether someone is fit for work, or may be fit for work under certain conditions.

What are some rules of thumb for dealing with sickness?

Occasional sickness absences are inevitable, and you should take an overall sympathetic attitude towards letting people attend doctor, dentist or hospital appointments.

With this in mind, you should encourage behaviour among your employees which will minimise the impact such incidents have on your business. In particular:

  • Encourage employees to book appointments at the beginning or end of the day: This will cut down on lost time.
  • Ask to see appointment cards where possible: Be aware that one-off GP visits probably won’t produce documentary evidence.
  • sAssist people in their efforts to return to work: A broken arm or leg might mean someone is simply having difficulty getting to or from work, so consider offering a taxi for them, for example. More generally, you can ease peoples’ return to work by offering them light or reduced duties.
  • Require employees to take paid holiday for purely cosmetic surgery: Also, recognise that the timing of non-cosmetic surgery, even minor, is very rarely down to the patient.

What do I look for when tracking suspicious patterns of absence?

You might suspect a frequently sick employee is not quite as unwell as they claim, and there are certainly a number of tell-tale signs that indicate someone is exploiting the system.

In particular, look for lots of short absences on particular days – if one of your employees has a habit of calling in sick on Monday or Friday, it’s fair to say this would be a suspicious pattern of absence.

Additionally, if you know one of your employees follows a particular team or sport, look at whether their absences coincide with major sporting events. Someone who is always mysteriously off sick during England games at the World Cup would probably warrant investigation.

Frequent one-day absences and lateness could either indicate chronic health issues or domestic issues. Either way, they need to be addressed. Consider sending your employee for assessment to Occupational Health (more on this below).

You might think there is nothing you can do about rates of employee illness, but this isn’t true. There are some steps you can take to reduce the time lost to sickness absence.

  • Create a healthy working environment. Follow health and safety law to the letter, and try to create an environment conducive to good health in general – invest in ergonomic chairs and monitors, good ventilation, and bright lighting.
  • Encourage employees with infectious illnesses to stay home. An employee with a cold or the flu might be tempted to battle through and come to work anyway, which would only have the effect of spreading their illness to the rest of the workforce. Especially in the winter months, it will probably make more sense to err on the side of caution and tell employees to stay home if they have an infectious illness.
  • Move sick employees to duties they can perform: If there is a role in your company which would not affect their condition, consider whether they could do that in the interim.
  • Offer adjustments to help employees return to work: If you have a fit note which states an employee ‘may be’ fit for work, consider whether you could offer adjustments to assist their return, such as reduced hours.

Can I discipline an employee for sickness absence?

People who abuse the system cause problems for you and their fellow employees, so it is important to crack down on intransigence early. At the same time, you need to be extremely careful in the actions you take – get it wrong here and you could face the nightmare scenario of losing a disability discrimination case in the employment tribunal.

As with any disciplinary process at work, following the right procedure is essential. Use the below steps as a framework for developing your own policy on sickness and discipline.

  • Write up a disciplinary procedure and outline the consequences of unauthorised absence. You should consider what punishments you wish to impose for such offences; it is generally a good idea to have a sliding scale ordering the sanctions in terms of severity. For example, you could start with an informal warning, move on to written warnings or loss of salary or benefits, and reserve dismissal for the most serious of circumstances.
  • Enforce the disciplinary procedure fairly and consistently.There is no room for slapdash procedure or favouritism here; a failure to apply the rules fairly will put you at serious risk of tribunal proceedings. As with any misconduct, make sure you carry out a reasonable investigation, and write down the punishment you decide to impose so you can use it as a precedent for disciplinary decisions later on down the line.
  • Inform employees if their sickness absences are likely to cause problems. Before you throw the book at them, it’s good practice to inform an employee their behaviour could land them in trouble. Often this will be enough to nip the troublesome behaviour in the bud.
  • Withhold SSP if your employee doesn’t comply with procedure. If an employee misses the deadline to tell you about their illness within the time limits you’ve set out, you are perfectly entitled to withhold their SSP payments. You can also withhold if you ‘reasonably suspect’ someone is faking illness – but again, you need to have reasonable grounds for believing this. A hunch isn’t enough.
  • Ask for an HMRC investigation in cases of long-term sickness absence. If someone has been off sick more than four times in a year, you can ask HMRC to conduct their own investigation into the true reason behind an employee’s absence. You can find the address and what to include in a letter on this page.
  • Focus on the impact of absences from work when disciplining the employee. Unless you have concrete evidence they are faking illness, you shouldn’t accuse them of doing so. This doesn’t mean you can’t discipline or dismiss them, though; you need to focus on the impact their repeated absences are having on your business, rather than the reasons for the absence. This will make it much easier to justify your decision if the worst happens and the employee takes you to a tribunal.

An employee has been off sick for a long time. How do I deal with this?

When someone is on long-term sick leave, it is important to manage them properly – don’t leave them out in the cold. Someone with a long-term illness is likely to have a ‘disability’ under the meaning of the Equality Act 2010, which means you have a duty to make ‘reasonable adjustments’ to accommodate them. This requires you to consider whether you could alter their job in some way to allow them to continue working for you – although you can be justified in refusing to do so if the adjustments don’t make business sense. Of course, aside from your legal obligations, properly managing a sick employee can result in increased morale and loyalty from them, and potentially increase the likelihood of them returning to work sooner.

As a starting point, you should monitor an employee’s progress with regular progress reports and home visits; keeping them in the loop in this way will make them feel valued and allow you to monitor their situation. You could also explore the possibility of alternative roles at work – perhaps a factory worker who is physically injured could return to work at a desk job, for example.

Remember that people often feel afraid to return after a long-term absence. In this instance, many employers have found a staged return to work represents a good compromise; the employee steadily increases their hours until they are back at full capacity. You should consult your employee’s GP or an occupational health professional for advice on this.

If a return to work is unlikely, you could consider offering the employee an early retirement package. It is actually legal to simply dismiss a member of staff for long-term illness in some circumstances (more on this below) but in the interests of good relations and the avoidance of tribunal proceedings you might want to incentivise them with beneficial pension arrangements.

Can I dismiss an employee for long-term sickness?

There are some circumstances you can do so, but it is an area fraught with legal pitfalls. As with all dismissals, follow the procedure to the letter and keep a record of everything.

Essentially, the law says you can dismiss a sick employee when it is ‘reasonable’ to do so. Whether or not the dismissal is reasonable depends on how likely the return to work is, and the impact the long-term absence of an employee is having on your business. If you are a larger company, you might need to wait until the full 28-week SSP period expires, but you may be able to dismiss sooner if you are a small firm where an employee’s absence starts to threaten the success of the business.

It is absolutely crucial to gather as much evidence as possible if you’re thinking of dismissing an employee for long-term illness, as you may have to demonstrate to a court that the dismissal was reasonable. Generally, this will mean getting a medical assessment from your employee’s GP – although they do have the right to refuse one of these. If they do, see if they will consent to an independent examination – if they still refuse, tell them you will have to take the decision based on the information that is available to you, which may result in dismissal.

If you do decide to dismiss an employee for long-term illness, follow the procedure set out in employment law to the letter.

Essentially, this means:

  • Notifying your employee in writing
  • Giving them the notice period they are legally entitled to (or paying them in lieu)


  1. My partner has worked for his employer for 9years almost. He is a Coach driver, but has to have an operation on his wrist, which means he may be off work converlessing for 3 months or so. He he intitled to full pay for those three months.

  2. My partner has worked for his employer for 9years almost. He is a Coach driver, but has to have an operation on his wrist, which means he may be off work converlessing for 3 months or so. He he intitled to full pay for those three months.

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