Statutory Sick Pay (Hansard, 10 January 1996)

§ Mr. Lilley

I am issuing a consultation paper today which seeks views on a proposal which would grant employers exemption from operating the rules of the statutory sick pay scheme if they pay wages or occupational sick pay at or above the SSP rate. It would allow greater flexibility to employers and cut back on administration. The proposed arrangement would particularly benefit employers with occupational sick pay schemes by removing the need to keep two sets of records. It would also have the advantage of including smaller employers who do not have a formal occupational sick pay scheme but who offer more generous pay when employees are off sick. Employees' underlying entitlement to SSP would not be affected.

The proposal forms part of the Government's on-going deregulation programme of lifting burdens and builds on the easements to the SSP rules and the considerable reduction in mandatory record keeping which I am introducing from April 1996.

I consulted last March 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 do not generally have occupational sick pay schemes and that employees' statutory rights might be removed. The exemption scheme ensures that employees' rights during periods of sickness are fully protected by retaining the underlying liability to pay SSP, while reducing administrative burdens on businesses.

The new arrangements could be introduced from April 1997 by means of an order under the Deregulation and Contracting Out Act 1994.