contractual sick pay problem

ArcherSay

I'm hoping one of you can help me with this, as employment and contract law are way out of my area.

I work for a small business in Northern Ireland. Due to an injury which my employer is aware of, I am likely to need to take some substantial time off work (I'm in a lot of pain and may need surgery).

My contract contains the following provisions for sick pay:
Less than 6 months continual service - nil basic, nil half salary
6 months to 12 months - nil basic, 1 month half salary
13 months to 2 years - 1 month basic, 2 months half salary
3 years to 5 years - 2 months basic, 2 months half salary
over 5 years - 2 months basic, 4 months half salary

I've been employed for 2 years and a couple of months . . . so I fall into a little black hole in their sick pay categories! I've never noticed this before but a contract that seems badly drafted, well, let's just say it doesn't surprise me in the slightest.

As I see it they intended one of three possibilities - 2-3 years service gets 1 month basic/2 months half, 2-3 years gets 2 months basic/2 months half, or 2-3 years service gets somewhere in the middle.

Obviously 2 basic/2 half would be best for me, but I have no idea what my rights are re this. I'd guess that as they drafted the contract, I shouldn't have to "pay" for errors/ambiguities they put in . . . but that might just be wishful thinking on my part. I also don't want to ask them what their intent was, because if I do I am quite sure they'll say their intent was to offer me the minimum possible.

Legally, if this contract only gives me the right to 1 month basic/2 months half I can live with that . . . but if the bad drafting gives me the right to more, I definitely want to take it. Any advice, please? I've been trying to look for information online but I can't find anything definitive . . . I thought contra proferentem might apply but I'm not sure if this is an ambiguity or just an ommission . . . thanks in advance guys, it's much appreciated!

ESKIMO

http://www.adviceguide.org.uk/nireland/your_money/employment/off_work_because_of_sickness.htm

LadyMissA

Googlewhacker wrote: »

As a technicality if they wish to enforce it they can. Contractual sickpay is extra to the statutory minimum so as long as it is not discriminatory in the eyes of the law and not breaking the contract they can do what they want.

can I ask is there a statutory minimum for paid sick?

SarEl

Googlewhacker wrote: »

As a technicality if they wish to enforce it they can. Contractual sickpay is extra to the statutory minimum so as long as it is not discriminatory in the eyes of the law and not breaking the contract they can do what they want.

May I just clarify - because somebody will come along and misunderstand this - contractual sick pay is not extra to statutory sick pay. It includes statutory sick pay (which the employer reclaims). Full pay therefore means full pay (a bit obvious that I know), but half pay actually means half pay plus statutory sick pay (so somewhat more than half pay).

But on the OP's question, whilst I agree it is badly drafted, the intention is clear - the starting point for two months basic and two months half pay is 3 years. But since nobody else appears to have noticed this - you may get brownie point (ok, not directly translateable into cash, but when facing a substantial amount of time off work, you take what you can get)

SarEl

Googlewhacker wrote: »

Yes sorry not clear but you are correct in what I meant.

Why does half pay mean half pay PLUS SSP because if half pay is over SSP then it is meeting the minimum required?

It's a quirk. Don't ask me how it happened because I don't know, and have been waiting for years for the other shoe to drop and someone to change it. And I am far from an expert on how the DWP rules work. But it has something to do with the fact that the SSP is yours not the employers - so full pay is actually "almost full pay plus SSP" - which doesn't make a bit of difference to the person receiving it. Somewhere in the working of the DWP it seems to say that someone can't get more than full pay (because that would be a reward for being sick and nobody would ever go to work!). But once the pay level drops, even if you get more than SSP would be, the employer isn't allowed to "offset" is against the contractual element, and so must pay SSP directly to the individual. Obviously, some employers have sick pay terms that are contractual for longer than SSP - in which case they continue contractual payments but not SSP.

I can only really explain the effect - precisely why it happens this way I don't know (I bet my accountant does because he explained all this to me years ago, but seriously - I wasn't all that interested in why!), and how on earth the government(s) have missed on this as a way of cutting costs I can't imagine.

chrisbur

SarEl wrote: »

It's a quirk. Don't ask me how it happened because I don't know, and have been waiting for years for the other shoe to drop and someone to change it. And I am far from an expert on how the DWP rules work. But it has something to do with the fact that the SSP is yours not the employers - so full pay is actually "almost full pay plus SSP" - which doesn't make a bit of difference to the person receiving it. Somewhere in the working of the DWP it seems to say that someone can't get more than full pay (because that would be a reward for being sick and nobody would ever go to work!). But once the pay level drops, even if you get more than SSP would be, the employer isn't allowed to "offset" is against the contractual element, and so must pay SSP directly to the individual. Obviously, some employers have sick pay terms that are contractual for longer than SSP - in which case they continue contractual payments but not SSP.

I can only really explain the effect - precisely why it happens this way I don't know (I bet my accountant does because he explained all this to me years ago, but seriously - I wasn't all that interested in why!), and how on earth the government(s) have missed on this as a way of cutting costs I can't imagine.

The following is from the employers guide to SSP
"Offsetting SSP against employee’s pay
Pay means any earnings, which count for NICs purposes, paid to an employee under a contract of service.For example, wages or Occupational Sick Pay (OSP) scheme payments. You can offset contractual earnings payments against the SSP you have to pay for the same day(s) so long as you pay earnings of at least the daily SSP rate due for each QD. You do not need to pay SSP on top of these payments unless you wish to do so."

Provided that the payment is made for the same qualifying day and is equal to or greater than the SSP due for that day then that is all that has to be paid. If an employer wishes to pay more then that is up to them, but paying half pay provided it was at least equal to the SSP due for that day would be all that was required.

Also see that earlier you said "It includes statutory sick pay (which the employer reclaims)" in fact the employer in the majority of cases cannot reclaim SSP. In some cases where the SSP forms a large proportion of the wages then some or all of the SSP can be reclaimed but in the main the cost is borne by the employer. When SSP was introduced it was reclaimable in full and for a year or two early on an extra amounr above the SSP cost was also reclaimable to cover employers' NI costs and admin; but this was soon cut back so only small employers could get anything back and then to the Percentage Threshold Scheme we have now, where the employer can make a reclaim if the SSP paid out in a month is a large enough percentage of their NI liability.

ArcherSay

Thanks for all the replies guys, that was very quick My background in law is commercial litigation, so I have absolutely no experience of how this kind of issue should be interpreted.

SarEl wrote: »

May I just clarify - because somebody will come along and misunderstand this - contractual sick pay is not extra to statutory sick pay. It includes statutory sick pay (which the employer reclaims). Full pay therefore means full pay (a bit obvious that I know), but half pay actually means half pay plus statutory sick pay (so somewhat more than half pay).

There's a futher clause in my contract that "All payments made during absence due to sickness or injury will be subject to the deduction therefrom of an amount equal to benefits received by the employee under the Statutory Sick Pay Scheme in respect of the period for which such payments are made" - I take this to mean that on half pay, pay is SSP + (half pay - SSP) . . . in other words just half pay, not half pay plus SSP.

(As an aside, it's certainly amusing to see the legalese of that paragraph compared to the glaring errors in the time cutoffs . . . looks to me like one was a copy/paste job, and another was written by someone on-site and not checked. Heh.)

But on the OP's question, whilst I agree it is badly drafted, the intention is clear - the starting point for two months basic and two months half pay is 3 years.

My sticking point is that I don't think the intention is clear, given the year long gap . . . the cutoff point would seem to be 1 month full/2 months half ending at 2 years, and not one day before 3 years.

I was vaguely hoping it would be a gimme, but if not then the best option is probably going to be me trying to (diplomatically) wrangle some small extra morsel out of them.

But since nobody else appears to have noticed this - you may get brownie point (ok, not directly translateable into cash, but when facing a substantial amount of time off work, you take what you can get)

Heh, brownie points, if only. In fairness I think the only brownie point situation with my employers is "try not to annoy ArcherSay TOO much, we don't want her making any kind of official complaint about the many, many, many issues in this nightmare of a job" . . . though that is indeed better than nothing!

SarEl

chrisbur wrote: »

The following is from the employers guide to SSP
"Offsetting SSP against employee’s pay
Pay means any earnings, which count for NICs purposes, paid to an employee under a contract of service.For example, wages or Occupational Sick Pay (OSP) scheme payments. You can offset contractual earnings payments against the SSP you have to pay for the same day(s) so long as you pay earnings of at least the daily SSP rate due for each QD. You do not need to pay SSP on top of these payments unless you wish to do so."

Provided that the payment is made for the same qualifying day and is equal to or greater than the SSP due for that day then that is all that has to be paid. If an employer wishes to pay more then that is up to them, but paying half pay provided it was at least equal to the SSP due for that day would be all that was required.

Also see that earlier you said "It includes statutory sick pay (which the employer reclaims)" in fact the employer in the majority of cases cannot reclaim SSP. In some cases where the SSP forms a large proportion of the wages then some or all of the SSP can be reclaimed but in the main the cost is borne by the employer. When SSP was introduced it was reclaimable in full and for a year or two early on an extra amounr above the SSP cost was also reclaimable to cover employers' NI costs and admin; but this was soon cut back so only small employers could get anything back and then to the Percentage Threshold Scheme we have now, where the employer can make a reclaim if the SSP paid out in a month is a large enough percentage of their NI liability.

I am happy to stand corrected - as I said this was the explanation I recived years ago, it is the practice I follow and intend to continue to do so; and it is certainly the practice follwed by a lot a employers I deal with, so I assumed that the explanation I got was correct (or possibly still correct - as I said it was some years ago).

pinklady21

SarEl wrote: »

It's a quirk. Don't ask me how it happened because I don't know, and have been waiting for years for the other shoe to drop and someone to change it. And I am far from an expert on how the DWP rules work. But it has something to do with the fact that the SSP is yours not the employers - so full pay is actually "almost full pay plus SSP" - which doesn't make a bit of difference to the person receiving it. Somewhere in the working of the DWP it seems to say that someone can't get more than full pay (because that would be a reward for being sick and nobody would ever go to work!). But once the pay level drops, even if you get more than SSP would be, the employer isn't allowed to "offset" is against the contractual element, and so must pay SSP directly to the individual. Obviously, some employers have sick pay terms that are contractual for longer than SSP - in which case they continue contractual payments but not SSP.

I can only really explain the effect - precisely why it happens this way I don't know (I bet my accountant does because he explained all this to me years ago, but seriously - I wasn't all that interested in why!), and how on earth the government(s) have missed on this as a way of cutting costs I can't imagine.

Another one of these quirks that has me flummoxed is how the PHI insurance cos get away with deducting an amount for state disability benefits (Incapacity Benefit or Employment Support Allowance) whether you claim it or not!
So in theory you have a policy which says "We will pay out 75% of pre illness salary", while in practice they calculate the 75% then lop off around £100 a week for IB / ESA.
Surely the govt would be wise to this, and would expect the Insurance cos to pay up in full, rather than expect the tax payer to pick up the tab, and have to deal with additional and unnecessary claims for State benefits.

ArcherSay

The plot thickens ...

I found a copy of the sickness policy and compared the figures.

The contract says '13 months to 2 years' = one month basic/two months half.
The sickness policy says '13 months to 2 full years' = one month basic/one month half.

I don't see how '2 full years' could possibly be interpreted as anything up to 3 years, it seems completely unambiguous. And of course the amounts of sick pay quoted are definitely contradictory. Sigh ...

Uncertain

ArcherSay wrote: »

The plot thickens ...

I found a copy of the sickness policy and compared the figures.

The contract says '13 months to 2 years' = one month basic/two months half.
The sickness policy says '13 months to 2 full years' = one month basic/one month half.

I don't see how '2 full years' could possibly be interpreted as anything up to 3 years, it seems completely unambiguous. And of course the amounts of sick pay quoted are definitely contradictory. Sigh ...

Remember is is very easy for the employer to have amended your contract and reduced the sick pay entitlement.

Basically all the have to do is give you notice of the change. Providing you don't object your contract is modified!

Have there been any memos or even a insert with a payslip saying that there will be a change from a certain date? Easy to overlook?

Also, it is sadly very common for sick pay to be "discretionary" Check your contract wording carefully. Often there is a clause saying it MAY be paid up to certain limits.

This is not always the case. If it doesn't apply to you then you have an absolute contractual right to whatever sick pay is laid down (obviously assuming you stick carefully to the rules regarding certificates etc).