Section 5 – Other
Statutory sick pay: funding of employers’ liabilities
Rationale for intervention
Currently, employers are obliged to pay Statutory Sick Pay (SSP) to eligible employees who are unable to work because of sickness. It is paid at a flat rate of £94.25 (increasing to £95.85 from 6 April 2020) for up to 28 weeks. The full cost of SSP is met by the employer.
In the event of a severe outbreak (pandemic) of Covid-19, the number of people off work would likely increase significantly. This would include those who are displaying virus-like symptoms, as well as those who are self-isolating as a precautionary measure in accordance with government public health advice. In a stretching scenario, it is possible that up to one fifth of employees may be absent from work during peak weeks. This would present a significant financial burden on employers through increased SSP costs.
The government wants to ensure that small and medium enterprises (SMEs) receive financial support where they incur additional SSP costs due to absences relating to coronavirus. The ability to recover SSP in this scenario is important to ensure that these employers are supported in a period when their payments of SSP are likely to escalate, and that employees are incentivised not to attend work when advised not to for reasons of public health security.
As delivery mechanisms for making payments to employers are limited to those currently in place, and as the intention is that the scope of recovery payments will be wider, a new power is needed.
The provisions in the Bill will allow for a rebate to be paid to employers to refund employers the costs of SSP for absences relating to coronavirus.
Other policy options considered?
Do nothing – this would mean that employers faced with an increased SSP burden as a result of an outbreak are left unsupported and may not be encouraged to support employees who are advised not to work for reasons of public health security.
There are different delivery mechanisms being considered as there is not an existing system by which government can refund SMEs for SSP costs. Any delivery mechanism needs to be operationalisable as quickly as possible to ensure timely payments are made to SMEs to limit short-term financial pressures during a severe outbreak of coronavirus.
Key considerations
There would be an immediate impact on employers should many of their employees being incapable of work due to coronavirus. There is the potential for cost to employers through additional costs of SSP combined with a loss of productivity.
To support with the short-term financial pressures in this scenario, a rebate will be paid to employers to refund small and medium employers the costs of SSP for absences relating to coronavirus. The rebate will be capped at 2 weeks of SSP per employee.This means that the additional cost to SME employers of paying SSP for coronavirus-related absences, including the suspension of SSP waiting days provided for in the Bill, would be fully met by government up to a limit of two weeks of absence.
Some employees may be able to continue working from home if they are self-isolating but not displaying symptoms. In these circumstances, they would be entitled to their normal wage as per their contract.
For employers who pay occupational sick pay (OSP), they may require a mechanism to distinguish between payments of SSP and OSP.
It is anticipated that this will be welcomed by the business community and reassuring to the public that the government is responding to business pressures faced by small and medium employers during an outbreak of coronavirus.
The rebate will only be made available in the event, and for the duration, of the outbreak, and will lapse once this period is over.
Statutory sick pay: suspension of waiting days
Rationale for intervention
Statutory sick pay (SSP) is paid from the fourth qualifying day of sickness absence. The first three days are known as waiting days.
There is concern that not paying sick pay for the first three days of sickness absence will encourage people to go into work even if they are sick, or if they are not sick but have been advised to self-isolate. This will reduce the effectiveness of efforts to contain or limit the spread of the virus.
The provisions in the Bill will allow for the government to temporarily suspend waiting days in the event of a severe outbreak/pandemic and lapse once the outbreak is over.
Other policy options considered?
Do nothing – retain waiting days. However, if individuals do not receive pay for the first three days of sickness, including a period where they are being required to self-isolate, they may still go to work. This risks a greater spread of the virus and will limit efforts to contain or delay. There would also be increasing public pressure to bring about the change.
Key considerations
The change will only apply to absences relating to coronavirus. In practice it will be for employers to determine which cases of sickness absence relate to coronavirus and which are due to other sickness reasons.
Temporarily suspending waiting days will place a direct financial burden on employers. As a result of the suspension of the rule, employees will also receive the daily rate of SSP for the first three qualifying days of absence. The cost to the employer per employee will vary depending on the number of qualifying days that the employee has in a week.
To offset some of these costs, the provisions in the Bill will also allow for a rebate to be paid to employers to refund employers the costs of SSP for absences relating to coronavirus.
The rule change will apply in the event, and for the duration, of the outbreak, and will lapse once this period is over.
Food supply chain (information)
These clauses will not be commenced unless there is a food supply chain disruption (or risk thereof) and a member of industry stops complying with requests for the voluntary provision of data.
Rationale for intervention
In the event of disruption to food supply chains due to the outbreak of coronavirus, the Government may seek to intervene to support industry efforts to restore efficient and equitable supply. The Government response to food supply disruption currently relies on information which is provided by industry on a voluntary, regular basis to Defra during the disruption. Without the provision of information from industry, Government is unable to develop an accurate view, making it difficult to support any industry response and inform a proportionate and effective Government response.
Defra has drafted these clauses (Food Supply Chains (Information))which would give the Secretary of State for Environment, Food and Rural Affairs the power to require the provision of specified information (e.g. on the location of certain food stocks). This would be required from individual companies/members of the food supply chain, in the event of disruption to food supply, and in the event that industry does not provide information to Government when asked.
Given our preference to continue to collaborate with industry on a voluntary basis, Defra does not wish to activate these clauses unless the power is required. Safeguards have been drafted into the clauses to ensure that they could not be used in any other situation.
Other policy options considered
Do nothing. Rely on industry to continue cooperating with existing information sharing procedures.
Non-legislative influence. In the event of non-compliance, we could seek to influence through industry representative bodies and ministerial engagement. There would be no explicit power of compulsion but previous events have shown that engagement with sector bodies and senior ministers can be persuasive.
Postponement of elections
The policy makes provision to postpone elections in England and Wales scheduled for 7th May 2020 by a year to 6 May 2021. It also makes provision for other relevant elections and referendums that may arise (for example, by-elections) to be postponed up to 5 May 2021, and for supplementary provisions to be made to handle the consequences of any election postponements.
Key considerations
The Bill will lead to some costs being deferred to next year for the postponement of scheduled polls and to a later date for postponed by-elections and local referendums, etc. There will be some costs already incurred for preparations for 7 May scheduled polls and for by-elections etc. Necessary expenditure will still need to be reimbursed to the Returning Officers that are responsible for the polls given they were incurred in good faith and with expectation of reimbursement as normal.