Occupational Sick Pay (OSP)

Where an employer has contractual terms relating to incapacity to work due to sickness and/or an Occupational Sick Pay (OSP) scheme, it is advisable that these are clearly set out in writing in the Contract of Employment.

Where there is no written Contract of Employment or where it does not cover these provisions, employers must by law provide employees with a written statement of particulars relating to them.

Where there is an OSP scheme, the provisions should state how much will be paid, how it will be paid and for how long. An employer can also choose to cover some employees and not others in a scheme provided that, by doing so there is no discrimination against employees on grounds of sex, sexual orientation, race, religion or belief, age or disability.

A typical OSP scheme will give full pay during a period of sickness for a certain length of time reducing to a percentage of full pay for a further set period with no sick pay thereafter. Often no OSP will be payable during a probationary period and/the level of entitlement will often increase with length of service in line with age discrimination legislation. The level to which an employer may exercise their absolute discretion in these situations should also be included.

If no duration for sickness payments is stated, a term may be implied to give effect to the presumed intention of the parties. The presumption may be that the employer will pay for a reasonable period only, which will depend on the term normally applicable in the particular employment, for example, by reference to the relevant national agreement.

Finally, any OSP scheme should also set out any conditions for payment that apply such as a requirement for self-certification for periods of absence up to seven days, and the production of a medical certificate for long periods. Employers are therefore reminded of the need to ensure that their rules are unambiguously communicated to their employees in writing.