Q&As

Are employers obliged to maintain an employee’s benefits during a period of long-term sick leave, in particular where the benefit concerned is provided under a salary sacrifice arrangement?

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Published on LexisPSL on 14/09/2018

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • Are employers obliged to maintain an employee’s benefits during a period of long-term sick leave, in particular where the benefit concerned is provided under a salary sacrifice arrangement?

We have assumed, for the purposes of this Q&A, that the employee’s salary has by this time either been suspended, or reduced.

An employee's contract of employment may contain express provisions entitling them to be paid, and to receive contractual benefits, during any periods of sickness absence. There may even in some cases be an implied term obliging the employer to pay and provide contractual benefits during periods of sickness absence.

In relation to express terms, an employer does not have to agree to any such express contractual terms. If the employer does agree, the contract of employment is likely to specify the duration of any entitlement to sick pay, the rate at which sick pay will be paid, and whether or not the employee will continue to receive their contractual benefits during a period of sickness absence.

An employer may, for example, agree to pay sick pay at full rate for a certain period during sickness absence—perhaps the first three or six months of sickness absence—and then at half rate for a further period, and then at nil rate after that. Precedent: Employment contract for senior employee, and the accompanying drafting notes, makes provision for various options i

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