TUC analysis suggests that the Employment Rights Bill, which introduces reforms to sick leave pay, could bring benefits to the UK economy of over PS2bn.
The new sick pay regulations that will come into effect in April next year will allow employees to claim sick pay on the first day they are sick. 1.3 million low-income workers will also be entitled to receive 80% of their wages.
WPI Economics’ analysis, commissioned by TUC, estimates that employers will benefit by around PS2.4bn while businesses will incur costs of PS425m.
This projection is based upon the assumption that an immediate right to SSP would help reduce sick leave, limit the spread in the workplace and allow employees to recover faster and return to work.
The TUC says that employees who are sick will have a better ability to manage their health and will reduce turnover.
According to the TUC, the reforms will benefit both the public purse and the tax payer. The analysis estimates that increased tax revenues and reduced social security payments will bring PS800,000,000 to the Exchequer. Reduced economic inactivity because of illness will also add PS700,000,000.
Recent Keep Britain Working Review has revealed that Britain is the only advanced country where economic inactivity increases.
The TUC stated that the current waiting period for SSP is three days, which means many workers who are eligible for it have to work without pay during the first few days after an illness. Millions of other workers miss out on the SSP because they earn too little.
Paul Nowak, general secretary of the TUC, said that reforms would “stop millions of people from being pushed to a financial cliff if they are sick”.
Workers will be able to take as much time as they need to recuperate without having to rush back to the office.
“That’s great for the business community and wider economy.” A happier, healthier workforce is more productive.
The Employment Rights Bill of the Government is important because it makes statutory sick leave available to all employees – from day one.
The TUC, despite its support for reforms is calling on the government to raise the SSP rate.
The rate will be similar to the current flat-rate of PS118.75 or 80% of the weekly wage, whichever is less.
Matthew Oakley is the founder and director of WPI Economics. He said that sickness absence costs the economy. It also impacts workers in terms of lost wages.
The improvement of sick pay will allow people to take as much time off to recover as they need and reduce the number of people who are on extended sick leave. This will also help to stem the flow of sick workers to out-of-work benefit and boost productivity.
As the government searches for new ideas to boost the UK’s competitiveness, it should put a greater emphasis on a restructured sick pay system and incentives for employers who invest in occupational health.
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