Agency Workers and Statutory Sick Pay - Court of Appeal confirms no entitlement for short-term agency workers

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The Court of Appeal, in a decision published on 27 June 2007, has agreed with earlier decisions of the General Commissioners and the High Court that the statutory sick pay (SSP) legislation excludes agency workers from entitlement to SSP if they have less than three months� continuous employment.

Schedule 11 to the Social Security Contributions and Benefits Act 1992 provides a list of situations where entitlement to SSP does not arise. As originally enacted, employees whose "contract of service was entered into for a specified period of not more than 3 months" were not entitled to SSP. The exclusion was subsequently removed by the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, when it became unlawful to discriminate in employment between permanent and temporary employees. However, those Regulations state specifically that "these Regulations shall not have effect in relation to"

fixed term employees on government training schemes,
agency workers engaged under a fixed term contract, and
a fixed term contract of apprenticeship.

In the case under consideration by the Court of Appeal, Commissioners for HMRC v Thorn Baker Limited and Others, two agency workers were refused SSP on this basis by Thorn Baker, the agency that had placed them in their jobs. HMRC appears to have taken the view throughout its series of appeals that the changes made by the 2002 Regulations were not intended to prevent any agency workers from qualifying for SSP. All of the arguments presented by HMRC were rejected by the judges. The court held that "the Regulations maintained the restriction on entitlement to statutory sick pay in relation to agency workers on short term assignments."

The decision does not mean that, in all situations, short-term agency workers are not entitled to SSP. They can become entitled to Statutory Sick Pay if in a single contract:

they work longer than the original period specified and the total period actually worked exceeds three months, or
the contract is extended for more than three months, from the time at which the extension is agreed.

Agency workers whose contracts are for three months or less can also become entitled to SSP if two or more such contracts with the same agency are separated by eight weeks (56 days) or less, and

the total length of the contracts is more than 13 weeks
the total period actually worked becomes more than 13 weeks or
the contracts are extended so that together they can run for more than 13 weeks.

The Court of Appeal ruling applies to agency workers only. Other short-term contract workers are unaffected and remain entitled to SSP.

...UK Payroll News - Latest

Sources:
Commissioners for HMRC v Thorn Baker Limited and Others
Judgement in the case of Commissioners for HMRC v Thorn Baker and others

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