What are an employer’s payment obligations when a suspended employee goes sick?

When an employee is suspended on full pay pending an investigation into potential misconduct or gross misconduct, many employers are under the impression that if the employee later becomes ill and, for example, unable to attend a disciplinary hearing, they can move to paying sick pay instead of the employee’s full salary. However, the law requires a more nuanced approach. Employers must continue to pay the full salary to the employee during the period of suspension, even if the employee later becomes sick while suspended. This principle was reinforced by the Employment Appeal Tribunal (EAT) in Wright v Weed Control Ltd 2007.

In this case, the employee was suspended for two weeks pending an investigation. The suspension was subject to a term in the employee’s employment contract which stated: "In the event of a serious or gross misconduct, an employee may be suspended on full basic pay while a full investigation is carried out."

Immediately after being suspended, the employee was signed off for two weeks by his doctor. Under his employment contract, he was entitled only to statutory sick pay (SSP) if he was sick. The employer took the view that the reason for the employee’s absence from work had changed from suspension to sickness, and therefore that it was only required to pay SSP instead of the employee’s full salary.

The EAT upheld the tribunal’s finding that the terms of the employee’s contract required that he be paid his full basic pay while suspended. It rejected the employer’s argument that this was subject to him being ready and willing to work. There was nothing in the contract to that effect, nor to the effect that he should simply receive what he would have been paid had he not been suspended.

What does this mean for employers?

For employers, the takeaway is clear: while an employee is suspended in accordance with a contractual provision entitling them to full pay, they are considered absent from work due to suspension. Subsequent events, such as sickness, do not change that. Even if the sickness prevents the employee from attending a disciplinary hearing, the suspension is the defining reason for their absence, and the employer’s obligation to continue paying the full salary remains intact.

As a result of the suspension, the employee’s obligation to work is suspended, but the employer’s obligation to continue paying salary remains in place.

Employers cannot argue that sickness, rather than the suspension, is the reason for the absence. The only way the employer could do that would be to lift the suspension but they can only do this if the suspension is no longer needed. They would not be able to suspend the employee again for the same reason once they are no longer sick.

Contractual obligations and employer risks

It is important for employers to be aware of their contractual obligations in such situations. The Wright v Weed Control case clearly illustrates that the terms of the employee’s contract govern the employer’s obligations, particularly in relation to suspension. In the absence of an explicit provision allowing for a reduction in pay during sickness while under suspension, employers are legally bound to continue paying the employee's full salary. Failure to do so could lead to legal claims for unlawful deduction from wages

Practical considerations for employers

Employers should review their contracts and ensure they have clear provisions relating to pay during suspension.

If there is a risk of prolonged absence due to sickness, it may be prudent for employers to maintain open communication with the employee and explore alternatives such as adjusting the disciplinary process or seeking medical advice about the employee’s ability to attend hearings or participate in the disciplinary process, for example, by way of obtaining an Occupational Health report.

Conclusion

The Wright v Weed Control case serves as an important reminder for employers that suspension pending an investigation is a distinct and separate process from sickness absence. A contractual obligation to pay full salary during suspension cannot be bypassed, even if the employee becomes ill during the period of suspension. Employers must ensure they understand the implications of suspension, their contractual responsibilities, and the legal framework governing these situations. Failing to uphold these obligations could result in legal claims and financial risks for the business.

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