Government’s sick pay U-turn welcomed by business groups

The government’s U-turn on proposals to make employers provide statutory sick pay (SSP) from the first day of illness has been welcomed by business groups.

Work and pensions secretary John Hutton announced the move last week, admitting that employers had voiced “strong concern” about plans to ditch the three-day SSP rule, under the government’s Green Paper on Welfare Reform.

The British Chamber of Commerce (BCC), which represents 135,000 firms across the UK, said the government had finally seen sense.

“The government has finally understood the burden this extra regulation would put on businesses,” said Lewis Sidnick, head of parliamentary affairs at the BCC. “They’re slowly getting the message that more regulation undermines competitiveness and that enough is enough.”

The BCC said that giving all employees the right to SSP from day one would create an incentive for individuals to take occasional sick days.

The Forum of Private Business, which represents 25,000 UK employers, said the extra regulation and costs would have put undue pressure on small firms.

Nick Goulding, chief executive of the lobby group, said: “Small businesses are already overburdened by regulations and uncertain of their employers’ rights. “Introducing another change would have added to the confusion.”

Goulding added that the change would “not only see an increase in costs, but give the green light for more unauthorised absences by employees who have no fear of being hit in the pocket”.

Hutton told a convention in Birmingham last week that the government had hoped to simplify the process of administering the scheme and protecting vulnerable employees.

Workplace absence cost the UK economy £13.2bn in 2005 – or £531 per employee – according to the annual survey by the CBI and insurer AXA.

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