Refusing pay rises due to sickness absence record unlikely to be illegal

Any legal action against an NHS Trust’s plan to refuse annual pay rises to staff who have taken more than 18 days off sick is likely to be unsuccessful unless employment contracts contains specifics about pay, according to law firm Beachcroft.

It emerged this week that Central Manchester University Hospitals Trust was introducing the new policy, which will also apply to staff who have had four separate sickness absences, as part of measures aimed at saving £120 million by 2014.

Any decision to refuse a pay rise would be discretionary and would not be applied to people with long-term illnesses or those with disabilities, the Trust said.

Health workers’ union Unison reacted angrily, warning that it would take legal action on behalf of affected staff, claiming nothing in existing contracts says staff can be denied annual incremental rises on grounds of taking too many sick days.

But Alex Lock, partner in the employment and pensions group at law firm Beachcroft, told Personnel Today that the legality of the scheme would depend on what the staff contracts of employment say and how flexible the Trust is in applying the policy.

“If the contracts set out a mechanism for deciding upon pay rises and this scheme runs counter to that, then arguably the Trust would be breaching the contract of employment,” he said.

“This is unlikely as few contracts are so prescriptive when it comes to pay. The employer will normally have enough flexibility to consider a variety of factors when looking at pay rises.”

Lock added that the Trust’s move reflects what many employers, particularly in the private sector, are doing implicitly: taking into account various aspects of an individual’s performance in deciding on whether or not and by how much to increase their pay. “This necessarily includes their attendance,” he added.

Last year, the NHS Health and Wellbeing Review found that 10 million working days are lost each year to sickness absence in the NHS. Employees are absent owing to sickness for 10.7 days a year compared with 9.7 days in the public sector as a whole, and 6.4 days for the private sector, at a cost of £1.7 billion per year.

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