REWARD
deter businesses from taking on new hires. Employers should monitor workers carefully during their probationary period and address any performance issues at the earliest opportunity. Statutory sick pay (SSP) The Bill proposes to implement the following two key changes to SSP: ● waiting period: removal of the requirement to serve a three-day waiting period of sickness absence, before being paid SSP on the fourth day of absence ● Lower Earnings Limit (LEL): extending eligibility for SSP to those earning less than the LEL. The current law requires employees to serve three days of sick leave before they can qualify to receive SSP on the fourth day of absence. The Bill aims to remove this requirement and make SSP payable from the first day of sickness. To prepare for this change, payroll professionals simply need to be aware that the starting day for SSP will be the first day of the employee’s absence and adjust their procedures that calculate sick pay to reflect the same. Present legislation provides that an employee must earn a minimum of £123 per week in order to be eligible for SSP. This is known as the LEL. The Bill proposes to revoke the exclusion of those who earn less than the LEL so that all employees, regardless of their salary, will receive sick pay. In the ‘Strengthening Statutory Sick Pay’ consultation paper, the government acknowledges that there are people who earn less than the LEL and therefore don’t
get the flat SSP rate of £116.75 per week. In those instances, it would be unfair to pay such employees the flat rate of SSP because they would be paid a greater amount in sick pay than they would through their usual wages. The consultation therefore suggests a taper be applied to the current SSP rate “whereby an employee is entitled to a certain percentage of their average weekly earnings or the current SSP flat rate, whichever is lower”. “The ambiguity surrounding the new statutory probationary period is hardly reassuring for employers. In particular, there is increased potential for new recruits who are simply unsuited for the role to launch tribunal claims, which could deter businesses from taking on new hires” The consultation invites employers and employer / business representative organisations to provide their views on what this “certain percentage” of earnings should be. The CIPP will be responding to the
consultation and the policy team is arranging a think tank for full, fellow and Chartered members. Invitations to attend will be sent out in due course. Fire and rehire Clause 22 of the Bill will make the dismissal of an employee based on their refusal to agree to a contract variation automatically unfair. As previously mentioned, there will be no two-year qualifying period once this is actioned. Under the proposal, the dismissal of an employee will be deemed automatically unfair if the principal reason for dismissal is as follows: l the employee refused to agree to a variation of contractual terms requested by the employer or l to enable the employer to hire another person (or recruit the same employee) under a new contract with new contractual terms but with substantively identical duties. There will be a defence available to employers where they are in dire financial difficulties and about to fall into an insolvency situation. However, this will be a very difficult defence to invoke as it relies on the dismissal being essential in order to prevent total company collapse. To prepare for the changes, employers are advised to take great caution from the outset when defining terms and conditions of contracts of employment. In the first instance, employers should think very seriously about whether they want to include certain terms as they will most likely be unable to change them later through the use of a ‘fire and rehire’ exercise. n
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| Professional in Payroll, Pensions and Reward |
Issue 106 | December 2024 - January 2025
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