AGENCY WORKERS AND STATUTORY SICK PAY

01.01.07

Agency Workers and Statutory Sick Pay

The Court of Appeal has recently decided that agency workers with contracts for 3 months or less are not entitled to statutory sick pay.

An employment agency called Thorn Baker Limited entered into an agency workers agreement with Mr Paradise, who was then supplied as a factory operative to one of its clients. When his GP signed him off work for one month, Mr Paradise argued that the agency should pay him statutory sick pay ("SSP"). The Court of Appeal decided that SSP is not payable to agency workers whose contract with their agency is for a specified period of 3 months or less. This appears to be due to the exclusion of agency workers from the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002.

It has been estimated that this decision will affect around 500,000 agency workers. It appears to be unjust that agency workers in this group, who are required to pay Class 1 national insurance contributions, are not entitled to SSP. The Revenue is currently considering the implications of the decision.

Commissioners for HMRC v Thorn Baker Limited 2007 EWCA Civ 626