What are your rights to notice and notice pay when you are on sick leave?
Being absent on sick leave is not a fundamental breach of contract, so unless your dismissal is on the grounds of gross misconduct (which can be the case if, for example, you do not follow a sick pay policy by providing an up to date fit note), you would be entitled to be given notice of termination of your employment if you have been dismissed on the grounds of ill health .
This will be the greater of either the period set out in your contract of employment, of if this is missing, the statutory minimum notice period of 1 week for every year worked (up to a maximum of 12 weeks).
Whether or not you are entitled to pay during this period will be governed by how generous your sick pay entitlements are and whether or not your contractual notice period (if you have one) is longer than your statutory minimum notice period.
What is the position if you are relying on a statutory notice period only?
If you have been employed for more than 1 month and less than two years, your statutory minimum notice period is not less than one week. Where your period of employment is two years or more, the statutory minimum notice period your employer is required to give you is not less than one week for each year of continuous employment, up to a maximum of 12 weeks.
If your employer is only required to give you the statutory minimum notice (because there are no notice clauses in your contract), you are entitled to receive full notice pay for that period of notice, regardless of whether you are on sick leave. This applies even if you have exhausted your statutory entitlement to statutory sick pay and have been on sick leave for a long period of time. If you are still receiving sick pay, the sick pay remaining would be offset against the amount of notice pay you are due.
What is the position if you have a right to contractual notice?
If you have a contractual notice period, whether or not you are entitled to actual notice pay over and above your Statutory Sick Pay or contractual sick pay will depend on whether the amount of notice your employer has to give under your contract of employment is more or less than your statutory minimum notice period.
If your contract of employment obliges your employer to give notice which is at least a week more than the statutory minimum notice period of 1 week for every complete year worked, your employer does not then need to make any additional payments during the notice period over and above either contractual sick pay or Statutory Sick Pay (SSP) In the event that your entitlement to sick pay has already been exhausted, no pay at all may be due during your contractual notice period.
For example, if you had exhausted your sick pay entitlement and been working for 5 years (entitling you to 5 weeks’ statutory minimum notice) and your contractual notice period was 12 weeks, you would not be entitled to any pay during your notice period if you were on sick leave. This is because notice to be given by the employer is at least one week more than statutory notice.
By contrast If, however, your contractual entitlement to notice is at least a week shorter than your statutory entitlement to notice then you would be entitled to full pay for your statutory minimum notice period even if your sick pay has been exhausted. As above, if you are still receiving sick pay, this can be offset against the amount of notice pay due.
Examples when statutory notice would be payable:
If you have been working for the company for 4 complete years and your contractual entitlement to notice was 1 month; having worked for the company for 4 complete years, you would be entitled to 4 weeks statutory entitlement to notice. 1 month (your contractual entitlement to notice) is less than a week longer than 4 weeks, which means the special rule kicks in, and you should be entitled to 4 weeks’ pay. For the remaining few days of your notice period, your contractual entitlement to notice pay would apply, which may mean no pay if you have exhausted your sick pay entitlement. Equally, to give another example, if you were on a 1 month notice period and you were with your employer for 6 complete years, you would be entitled to 6 weeks’ statutory notice. This is because your contractual entitlement to notice is not at least a week more than your statutory entitlement to notice.
Examples when statutory notice would not be payable:
If you have been with the company for 8 complete years and you are on a 3 months’ notice period, your contractual notice period of three months is more than one week over the statutory notice entitlement of eight weeks. This means that entitlement during notice is governed entirely by your contract, which may mean no pay if you have exhausted your sick pay entitlement (or SSP if there is any remaining). If you are on a 3 months’ calendar notice period you cannot usually benefit from this rule given that the courts have clarified this period is calculated as at least 1 week more than the maximum statutory notice entitlement of 12 weeks. This is the case whether notice has been given by the employer or the employee.
What if I resign rather than being dismissed?
The position differs if you resign. As with a dismissal scenario, the basic position is you would not be entitled to full pay for your notice period, only the balance of any contractual sick pay or SSP for the duration of your notice period if you remain on sick leave. If your SSP has run out, you would not be entitled to any pay. If however, your contractual notice period is less than one week more than your statutory notice entitlement (in the event of a dismissal), your employer should pay you your statutory entitlement to notice on resignation. Your statutory entitlement to notice in a resignation scenario is 1 week (regardless of how many years’ service). This differs from a dismissal scenario when this is 1 week for every year worked. For example, if your contractual entitlement to notice is 1 month, and you have been with the company for 4 complete years, your contractual entitlement to notice (1 month) is less than 1 week more than your statutory entitlement to notice (4 weeks) in the event you were to be dismissed. If you were to be dismissed, you would be entitled to 4 weeks’ pay, if you were to resign however, you would be entitled to 1 week’s pay.
This means you will be better off if you are only entitled to receive statutory minimum notice (or your notice does not exceed the statutory minimum by more than 1 week- although it is fair to say that some employers are not aware of the above rules, which means they may simply make a payment of your full salary during notice in any event. Conversely, they may not be paying enough.