When does an employer have to pay full notice pay to an employee on long term sick leave?
The answer is contained within the Employment Rights Act 1996 (ERA) and depends upon the employee’s entitlement to notice within the contract of employment and whether it is more or less than the employee’s statutory minimum notice entitlement. The ERA provides that where an employee is absent from work due to sickness and has exhausted their entitlement to sick pay (contractual and statutory) they may still be entitled to full pay for their statutory notice period. However, these rules do not apply if the employee is entitled to receive notice that is at least one week greater than their statutory entitlement.
This means if an employee has worked for you for two years and is entitled to receive statutory notice of two weeks under the contract of employment the employee will be entitled to full pay for the two week notice period even if the employee has exhausted all rights to sick pay. However, if the same employee had an entitlement to one month’s notice under the terms of the contract of employment, there would be no entitlement to be paid anything for the notice period where sick pay had been exhausted because their contractual notice would be greater than the entitlement to statutory notice by two weeks.
If you require further information on this topic or any other aspect of employment law please contact Christina Merrington.