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Is the UK the statutory sick pay person of Europe?

November 15, 2019

Statutory Sick Pay (SSP) is widely used in the UK but the clarity and understanding of how it works is sometimes unclear to organisations and employees.

What is clear is that if you compare statutory sick pay with other EU countries, the UK lags pay behind e.g. in Italy you can claim between 50 and 66% of average pay for up to 22 weeks which is roughly £1100 per month, with SSP being paid by the organisation.

Here in the UK, an employee can get £94.25 per week of SSP if they are deemed too ill to work. It is paid by the employees’ organisation for up to 28 weeks. The SSP weekly pay equates to £377 a month, whereas the average wage in the UK monthly is £2,307 and the average mortgage payment is approximately £670 per month. While many large organisations have company sick pay schemes which do pay 50%-100% of pay, 95% of people in the private sector work for small organisations and many of these do not have a company sick pay scheme. Add in the mix that in large parts of the UK, the average household has enough savings to pay for one month’s mortgage payment, you might think the title of this blog post maybe correct.

The impact on a small organisation of someone who goes off sick can be considerable in terms of productivity. Many find it difficult to get someone to cover another role and unless it’s clear that the person is going be off sick for a considerable amount of time, it is isn’t practical to employ someone on a short term contract to cover their work. If your company does pay sick pay then they will have an additional wage cost if they want to back fill the role while the person is off sick.

There is also a health dimension in relation to SSP. If you work in an organisation where there isn’t a company sick pay scheme and you become ill, you have three choices: either you go to your GP and get a fit note, you come into work or you book the time off as a holiday. There is data to show that people are making the decision to come into work while ill or take holidays to mask their illness, but what effect does that have on an organisation? Levels of presenteeism and leaveism are increasing and the natural conclusion is that productivity will reduce when these factors are in place.

So, what can be done to try and mitigate the effects of SSP on an organisation? In SOHAS’s experience we know that many organisations do not take a proactive approach to managing sickness absence. I often have conversations with managers and owners where they tell me they know how much sickness absence in their organisation is costing them and the problems it causes. Yet they often have no measures in place that tell them that someone is not well while they are at work. Is one of the issues at play that because the rate of SSP is so low compared to the average wage level, that they measure their bottom line rather than the health and productivity of their employees? If SSP was at the same level as other countries would that change their response?

 

It is worth looking at how other countries manage SSP. In Germany, the national health insurance compensates organisations for 80% of sick pay so long as the organisation does not employ more than 30 employees. Where an illness lasts longer than six weeks, the employee will receive a sickness allowance from the national health insurer amounting to 70% of the employee’s salary for a period of up to 78 weeks. In the UK, organisations ability to claim SSP back from the government was abolished in 2015.

A review of SSP in this country is long overdue and in the recent DWP consultation, SSP was recognised as an issue that need to be addressed. While we wait for the results, what would a fit for purpose SSP system look like?

  • SSP raised in line with other countries with similar economies
  • SSP aimed at small organisations, that allows them to claim back SSP from the government in a straightforward way.
  • Small organisations are given practical help to introduce preventative measures to manage their employees’ health before they go off sick.

The impact of the low rate of statutory sick pay for people aren’t in a company sick pay scheme is significant, not only from a financial point of view, but also for their future employment prospects and health. It is time for the government to recognise that a well-funded and managed SSP scheme, would be beneficial for employers, employees and the productivity of the nation.

 

 

 

 

 

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