Sick Pay Clause in UK Contracts: What It Means & Example Wording

When to Include a Sick Pay Clause

• In every employment contract — it is a legal requirement to state the terms of incapacity and any sick pay arrangements in the written statement of particulars
• When offering enhanced sick pay as a recruitment and retention benefit
• When defining the process for reporting sickness absence, providing medical evidence, and returning to work

Example Wording

This example wording is illustrative only. Customise it to your specific circumstances and consider seeking legal advice.

Is a Sick Pay Clause Enforceable in the UK?

Sick pay clauses are enforceable as contractual terms. SSP is a statutory entitlement under the Social Security Contributions and Benefits Act 1992 and cannot be excluded. Where an employer provides enhanced contractual sick pay, the terms of the scheme are binding. Courts will enforce contractual sick pay obligations, and failure to pay can constitute a breach of contract. However, employers can legitimately make contractual sick pay conditional on compliance with absence reporting requirements and medical evidence.

Common Mistakes

• Failing to include sick pay terms in the employment contract — this is a legal requirement under section 1 of the Employment Rights Act 1996
• Not specifying that contractual sick pay is inclusive of SSP — without this clarification, the employee might argue they are entitled to contractual sick pay plus SSP on top
• Making no provision for long-term sickness — without clear terms, an employer may face difficulties managing a prolonged absence or transitioning to SSP only