Unions and business leaders demand expansion of sick pay support

In a rare joint intervention, the TUC and FSB have today joined forces to call on the Chancellor to deliver sick pay for all and to support employers by making the employer rebate permanent.

In a letter to Rishi Sunak, the two organisations representing workers and small businesses urge the chancellor to “create an effective sick pay system to underpin the economic recovery, ensure that all workers that need access to sick pay would receive it regardless of earnings, and make sure that all employers would be able to afford it.”

The lower earnings limit means that statutory sick pay is only available to employees earning £120 per week or more – leaving two million low-paid workers, mostly women, without any sick pay at all.

As the pandemic recedes, the TUC and FSB are encouraging the government to learns lessons from the crisis and take “a fresh look at the issue” – arguing there is “a new awareness of the need for people to protect their health at work, and to avoid the spread of respiratory viruses in the workplace”.

During the peak of the Omicron variant, the ONS reported 7 per cent of adults were self-isolating, equating to around 2 million people out of the workforce.

At the end of last year, the chancellor announced a rebate for small employers on sick pay. The groups are calling for this rebate to be both made permanent and adjusted to cover all sickness absence, alongside the removal of the lower earnings limit.

In July, ministers rowed back on removing the lower earnings limit – arguing it was “not the right time” because the furlough scheme, £20 Universal Credit uplift and temporary employer rebate were all in place. Only the temporary rebate remains in place.

Alongside the letter, FSB today reveals that the average cost of sickness absence to small employers stood at just over £3,500 last year. The figure covers additional cost implications of having staff away from the workplace, including paying for cover and overtime. There are just under 1.4 million employers with fewer than 50 employees across the UK, according to government figures, putting the estimated cost of SSP to the smallest business at just shy of £5 billion.

TUC General Secretary Frances O’Grady said: “No one should be forced to choose between doing the right thing and self-isolating or putting food on the table.

“But millions of low-paid workers have faced this impossible choice.

“Two years into the pandemic, it’s time ministers stopped turning a blind eye to this obvious problem and fixed our broken sick pay system.

“Delivering sick pay for all would be an important first step. But with statutory sick pay at a measly £96 a week, we need ministers to increase it to real Living wage too.”

Jonathan Ashworth MP, Labour’s shadow work and pensions secretary, commenting on the TUC and FSB writing to the Chancellor and calling for action on sick pay, said: “Learning to live with Covid is the not the same as ignoring it and weakening statutory sick pay would be utterly irresponsible; forcing low paid people to make choices between their health and putting food on the table.

“But even this concession important though it was, is not enough, we still need decent sick pay for all. Weakening statutory sick pay now would prove once again that Boris Johnson and Rishi Sunak’s are not on the side of working people.”