What is the entitlement to pay when resigning during a period of absence?
Resigning during a period of absence can cause confusion when determining what the employee’s entitlements are relating to pay.
The reason for the absence could range from maternity leave to sickness but could fall under any other statutory leave provision, (adoption/paternity/shared parental leave and lay off).
In this case the client had an employee who had been on long term sick for over a year and had resigned. The employee had over nine years’ length of service at the point he resigned.
The client wanted to know what the employee’s entitlement to pay would be ...
... since the employee had been enquiring about it. The employer told him he would be entitled to nothing as his sick pay had ceased months earlier.
Now then, this will probably blow your mind because it certainly had the client in a spin when I advised him! The employee’s entitlement to pay in this case would be his full pay for nine weeks.
Shock, horror I hear you say! How can an employee who has been off sick for over year, whose sick pay has ceased months earlier be entitled to full pay, you might well ask!
Employment Rights Act 1996
Well, this complicated piece of legislation somehow made its way into sections 86-91 of the Employment Rights Act 1996 (ERA).
Among other things, Sections 86-91 of the ERA provide that if the employer’s notice he would have to give the employee under the contract is at least one week longer than what the employee would be entitled to statutorily, then the employee would receive his contractual entitlement i.e Statutory Sick Pay (SSP), during any part of the notice where he is unable to attend work. In which case the employee would receive zero pay because the SSP had already been exhausted.
If, however, the notice the employer would have to give falls under the statutory rules i.e one week for each complete year of service up to a maximum of 12 weeks, then the employee would be entitled to his full pay for the entire notice period.
The rules are slightly different if there is no notice clause in the contract or no contract at all whatever the case maybe, which I won’t bore you with here.
If you do happen to find yourself in this type of situation with an employee resigning during a period of absence, I would urge you to contact us so that we can assess what the employee’s entitlements are for you.
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