Statutory Maternity and Sick Pay (Hansard, 6 November 1995)

§ Mr. Heald

We intend to introduce a number of simplifications to the statutory sick pay and statutory maternity pay schemes from April 1996. These will include a considerable reduction for employers in the amount of mandatory SSP record-keeping; more flexible time limits for providing SSP information to employees; removing the exclusion from SSP and SMP of employees, including certain mariners, air personnel and continental shelf workers, who are outside the European Economic Area during a period of sickness or maternity; reducing to one month the period for notifying sick absence to an employer where there is good cause for delay, removing the need for employers to issue a form to every leaver who was recently sick and allowing this form, where issued, to be a computer print-out. We will be laying regulations to give effect to these changes in due course.

These proposals arise out of a consultation paper that was issued in March which sought views from all sides of industry on cutting red tape in the SSP-SMP schemes. The consultation formed part of the Government's on-going deregulation programme of lifting burdens on business. We are grateful to all those organisations and individuals who responded. Their contributions proved very valuable in helping us to decide the way forward. Copies of the responses will be placed in the Library.

The consultation paper also sought views on whether employers should be allowed to opt out of SSP if they pay at least the equivalent in occupational sick pay. Employers' organisations were generally in favour of opting out as a means of reducing administration costs, but there were concerns that small businesses could not opt out as they did not generally have occupational sick pay schemes. Employees' organisations were concerned that employees' statutory rights would be removed.

In the light of these concerns, we propose to retain the underlying liability to pay SSP but exempt any employer who pays contractual remuneration, including occupational sick pay, at or above the SSP rate for a day of incapacity for work, from the need to operate the detailed SSP rules. This revised scheme will ensure that employees' rights are fully protected, reduce administrative burdens and also be available to employers 651W with or without an occupational sick pay scheme. We aim to introduce the new arrangements from April 1997 by means of an order under the Deregulation and Contracting Out Act 1994, following further consultation on the detailed proposals.

Other changes to the SSP scheme which received support but which require amendment of primary legislation will be considered as soon as a suitable opportunity arises. They include changing the rule on SSP entitlement during a trade dispute; removing the links between separate contracts of service with the same employer and removing the exclusion from SSP of women who have received maternity allowance within eight weeks of the start of a period of sickness.

These changes build on the simplification of the SSP and SMP schemes which we implemented last year. The lower rate of SSP was abolished so that all employees who qualify now receive the same rate of SSP. For SMP three service qualification tests of 26 weeks, two years and five years were replaced by one test of 26 weeks employment. In addition, all women qualifying for SMP now receive 90 per cent. of their earnings for the first six weeks of maternity leave and a flat rate for the next 12 weeks. Previously, the rate of SMP paid depended on the length of service a woman had with her employer.