Employment Bill [HL]

The Committee can say that we are genuinely grateful to the noble Lords, Lord Razzall and Lord Cotter, for raising these issues. While this may be to one extreme, I do not think that any harm will be done by having a short debate on this matter. It is also extremely helpful to the noble Lord, Lord Henley, as it will bring back happy memories of when he sat where I do now. I do not think that my noble friend Lady Turner needs any help with this, because she knows all about statutory sick pay and has done since the previous Bill went through. Statutory sick pay is payable to employees for up to 28 weeks of incapacity for work. Employers have a statutory liability to pay statutory sick pay to qualifying employees who are incapable of work under their contract of service. The scheme is well established. Employers are fully responsible for the cost and operation of the scheme. The Department for Work and Pensions has policy responsibility, and it is policed by Her Majesty’s Revenue and Customs. HMRC makes formal decisions to resolve disputes between employers and employees. It is also responsible for imposing penalties on non-compliant employers. The noble Lord is seeking to extend the payment of statutory sick pay beyond the conclusion of a contract for those employees whose contract is ended as a direct result of the resolution of a grievance or disciplinary procedure. In those cases, employers would be required to pay statutory sick pay for the full 28 weeks, despite the fact that there is no longer any employee/employer relationship. We do not think that it would be appropriate to deviate from the fundamental principle that only employees are entitled to statutory sick pay. Entitlement is brought to an end with the conclusion of a contract. To do as is suggested would not only entail additional costs for an employer but would involve him in needing to determine an employee’s incapacity under a contract that is no longer in existence. The noble Lord, Lord Razzall, may say, ““But what happens if this is being done deliberately by the employer to escape his responsibilities?””. That is at the heart of the amendment. The Statutory Sick Pay (General) Regulations 1982—I do not know whether the noble Lord, Lord Henley, dealt with those regulations—specifically provide protection for employees whose contract of service has been brought to an end by an employer solely or mainly to avoid statutory sick pay liability. In those circumstances, the law provides that liability to pay statutory sick pay remains with the employer until that liability ends for some other reason. Similarly, should statutory sick pay come to an end but an employee’s incapacity continues, that employee may have recourse to financial assistance through the benefit system. The provision needs to strike a balance between fairness to employees and keeping burdens on employers—in terms of cost and complexity—to a minimum. If the amendment were accepted, it would tip the balance too far in favour of employees and against the needs of employers. Although I am grateful that the issue has been raised, existing law deals with the dangers that have been mentioned.