Consultation on Statutory Sick Pay reform imminent

03 June 2019

 

In a speech on the future of the labour market, the Secretary of State for Work and Pensions said that government will at last be shortly consulting on reforming Statutory Sick Pay.

 

At the Recruitment and Employment Confederation, talking about the future of the Labour Market, Amber Rudd said:

 

“We will shortly consult on reforming Statutory Sick Pay, in order to better support employers to retain staff who experience health problems. The current system is failing to support those who fall ill in work, one of several factors causing older people to choose retirement when they still have a huge amount to offer. One in 4 men, and 1 in 3 women, have not worked for at least 5 years before they reach State Pension age.”

 

Background

The government pledged there would be a consultation in their November 2017 response to the green paper ‘Improving Lives - The Future of Work, Health and Disability’. Government said that they:

 

“…want to see a reformed SSP system which supports more flexible working … to help support phased returns to work including spacing out working days during a return to work, managing a long-term health condition, or recovering from illness.”

 

Government also pledged to:

  • Improve and better publicise existing guidance on SSP eligibility to ensure that employers and employees each understand their rights and responsibilities; and
  • Consider Matthew Taylor’s recommendations about SSP eligibility and the way entitlement is accrued and about sickness absence management.

 

Flexible SSP – what did you say?

In advance of the consultation that we were led to believe would be published later in 2018, the CIPP policy team ran a survey during April 2018 to try and gather some early thoughts and opinions. Our findings from members and the wider payroll profession are still very much relevant as we wait for the ‘imminent’ publication of said consultation. In summary:

 

  • There was a range of numbers on the payroll from respondents, but the majority were between 250 and 9,999.
  • 89% offer both SSP and OSP schemes with differing options depending on their terms and conditions.
  • 87% offer an initial return to work on altered hours (phased return) after a period of sickness. 77% of which said that each case is looked at on an individual basis and that they have no set timescale for employees to be off before the phased return is offered.
  • With regards to how employers pay their staff on a return to work after a period of sickness on altered hours, 49% only pay for the hours worked, whereas it was almost evenly split where some employers pay full pay regardless of hours worked and the others pay for hours worked, topped up with OSP or SSP.
  • We asked what respondents thought they would need to do or to adapt their payroll systems and processes to accommodate employees returning to work on altered hours and paid a mixture of OSP & SSP. Responses were that software would need to be adapted/updated, if the change was to legislation then staff would need to be educated and more manual intervention would be required.
  • Some respondents did say that they felt little or no change would be required.
  • We asked how long it would take to implement these changes and the answers varied as it would depend on who and what it affects. If legislation was changed then this would a decent lead time for software developers, then there is the implementation, training, educating etc.
  • The cost of these changes is varied or not applicable. It may be that some of the respondents may not be involved in the ‘cost implications’ of the business so would be unable to answer and also what the changes will actually be is difficult to say at this stage.
  • We also asked what the overall cost of sickness management change would be if flexible returns were offered. The majority stated that they offer this service in some form already, others believe it will not affect the cost and only a minority felt it would be expensive.
  • From additional comments to the survey, it would seem that the way forward is a total rethink of the SSP system and that the waiting days should be abolished.

 

We passed on the full results of our survey to the Department for Work and Pensions, who are leading on these reforms and we shall continue to work with them through consultation and change, in whatever form that may be. We will most certainly be calling on you, the payroll professionals, again, for your expertise and opinions.