FSB and TUC call on Chancellor to deliver sick pay for all

Press Releases 18 Feb 2022

Frances O’Grady and Martin McTague pen joint letter to Chancellor demanding action on sick pay – and support for employers as annual cost to small firms nears £5 billion

In a rare joint intervention, the TUC and FSB have today (Friday) joined forces to call on the Chancellor to deliver sick pay for all and to support employers with the associated costs by making the employer rebate permanent.  

In a letter to Rishi Sunak, the two organisations representing workers and small businesses urge the chancellor to “create an effective sick pay system to underpin the economic recovery, ensure that all workers that need access to sick pay would receive it regardless of earnings, and make sure that all employers would be able to afford it.” 

The lower earnings limit means that statutory sick pay is only available to employees earning £120 per week or more – leaving two million low-paid workers, mostly women, without any sick pay at all.  

As the pandemic recedes, the TUC and FSB are encouraging the Government to learns lessons from the crisis and take “a fresh look at the issue” – arguing there is “a new awareness of the need for people to protect their health at work, and to avoid the spread of respiratory viruses in the workplace”.  

During the peak of the Omicron variant, the ONS reported 7 per cent of adults were self-isolating, equating to around 2 million people out of the workforce.  

At the end of last year, the Chancellor announced a rebate for small employers on sick pay. The groups are calling for this rebate to be both made permanent and adjusted to cover all sickness absence, alongside the removal of the lower earnings limit.  

In July, ministers rowed back on removing the lower earnings limit – arguing it was “not the right time” because the furlough scheme, £20 Universal Credit uplift and temporary employer rebate were all in place. Only the temporary rebate remains in place.  

Alongside the letter, FSB today reveals that the average cost of sickness absence to small employers stood at just over £3,500 last year. The figure covers additional cost implications of having staff away from the workplace, including paying for cover and overtime.

There are just under 1.4 million employers with fewer than 50 employees across the UK, according to government figures, putting the estimated cost of SSP to the smallest business at just shy of £5 billion.    

TUC General Secretary Frances O’Grady said:  

“No one should be forced to choose between doing the right thing and self-isolating or putting food on the table.  

“But millions of low-paid workers have faced this impossible choice.  

“Two years into the pandemic, it’s time ministers stopped turning a blind eye to this obvious problem and fixed our broken sick pay system.   

“Delivering sick pay for all would be an important first step. But with statutory sick pay at a measly £96 a week, we need ministers to increase it to real Living wage too so people can afford to self-isolate.”  

FSB National Vice Chair Martin McTague said:  

“Small business owners are struggling to find £5 billion a year for sick pay costs. Last year, the Chancellor responded to our calls for help with a reintroduction of the small employer sick pay rebate until the end of March.   

“However, with inflation driving up business costs, and forthcoming NICs hikes increasing the tax burden on them to a level not seen since the 1950s – there could not be a worse time to remove the rebate. 

“The Government should do the right thing and make the small employer rebate a permanent feature of how we manage workplace sickness, and protect small firms which help those with health challenges into work.  

“Without this help, small firms will be forced to take difficult decisions on pay, jobs and prices.” 

Media contact

Matt Dickinson

Matt Dickinson

Deputy Head of Media & Communications

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About FSB

As the UK’s largest business support group, FSB is the voice of the UK’s small businesses and the self-employed. Established over 40 years ago to help its members succeed in business, FSB is a non-profit making and non-party political organisation that’s led by its members, for its members. As the UK’s leading business campaigner, FSB is focused on delivering change which supports smaller businesses to grow and succeed.

FSB offers members a wide range of vital business services, including access to finance, business banking, legal advice and support along with a powerful voice in Government. Each year FSB also runs the UK’s Celebrating Small Business Awards. More information is available at www.fsb.org.uk. You can follow us on twitter @fsb_policy and on Instagram @fsb_uk.