Sick pay whilst working in additional employment

Whilst there is some misconception in this regard, the Employment Appeal Tribunal (EAT) has confirmed that, where the employee’s contract does not prevent this, the employee is permitted to take sick leave and claim statutory sick pay for a job which they have been declared medically unfit to carry out, while working in a different job which they are medically able to fulfil their duties in.  In that case, the employee was employed part-time as a midwife for the NHS. Her contract of employment prohibited her from working elsewhere without her employer’s consent.  She was also employed by another NHS trust on a part-time basis carrying out a desk-based job.  When her chronic knee condition prevented her from working as a midwife, she continued working in her secondary part-time employment in her sedentary role, which was not affected by her ill-health condition.   When her employer found out she was working elsewhere despite being signed off as sick, it proceeded to dismiss her on the basis that she had defrauded her employer of a "large sum of money" due to claiming sick pay whilst fit to work in her other employment.  The EAT held that her dismissal was unfair as there was nothing to stop an employee claiming sick pay while medically unfit for one job, and carrying out work for another job that they are fit to do.  However, the EAT did find that the employee in that case had committed an act of misconduct by failing to obtain her employer’s consent to take on additional employment, in breach of her contract of employment.  For this reason, it decided that the damages awarded to the employee for unfair dismissal should be reduced by 30%, as a result of her contributory fault.

Whether employees are permitted to take on additional employment depends on the terms of the contract of employment. For example, some employment contracts may stipulate that the employee is not permitted to work for another employer without their employer’s consent, as in the above case. Where the employee does so, this may be treated as a disciplinary matter on the basis that the employee has breached the contract in undertaking other employment without permission, although it is doubtful that it would be reasonable for the employer to dismiss for this reason alone.  In other cases, employees may be free under the terms of their contract to engage in other work, outside their contractual working hours, provided they do not work for a competitor. Where an employee is not prevented from working in another role under the terms of their contract, then they are under no legal obligation to tell their employer about their other job unless their contract states that they are required to do so. This right is not affected where the employee is medically unfit to work for their employer, but are able to continue in their other job, due to the difference in the nature of the work.

Where the employee’s GP states on the employee’s fit note that they may be fit for work if certain adjustments can be made, the employer can offer an alternative role/reduced duties, or amended hours that may be available while their medical condition prevents them from carrying out their usual duties. Where the employer is unable to make the adjustments suggested by the GP, the employee will remain on sick leave until their fit note expires. 

In contrast, in a later case, the EAT found that the employer was entitled to dismiss an employee who carried out private work of the same nature as the work they did for their employer during sick leave whilst in receipt of full contractual sick pay, where the employer’s policy prohibited this and the employee was made aware that doing so may amount to gross misconduct.

Where the employer has evidence that proves the employee is working in a like-for-like role while claiming sick pay from them, this may indicate there is a disciplinary case for the employee to answer. This is because a dishonest claim for sick pay will constitute gross misconduct and amount to a breach of trust and confidence, which usually gives the employer the right to summarily dismiss their employee, subject to following a fair dismissal process and the consideration of any relevant mitigating factors. Prior to deciding to take disciplinary action, it’s important for the employer to carry out a reasonable investigation. This is likely to involve investigating the allegation with the employee and any witnesses and seeking the employee’s consent to obtain medical advice as to whether the employee is fit to carry out the other work they carried on whilst on sick leave.  The employer should obtain legal advice in the first instance, particularly where the employer intends to dismiss the employee.