Case law: agency workers not entitled to statutory sick pay

Employers are not liable to pay statutory sick pay to agency workers on contracts lasting less than three months, following a recent Court of Appeal ruling.

An agency worker was engaged by an employment agency for a period not exceeding three months. While he was working as a factory operative for a client of the agency, he was advised by his doctor to take a month off work for abdominal strain. The agency refused the worker's claim that it was liable to pay him statutory sick pay, relying on the provisions of the Social Security Contributions and Benefits Act 1992 which provide that agency workers on contracts of less than three months are excluded from the obligation to pay statutory sick pay.

It was argued on behalf of the worker that the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, in regulation 11 and Schedule 2, removed the exclusion in relation to agency workers. However, the Court of Appeal confirmed that the effect of regulation 19 was that the entire 2002 Regulations did not apply to agency workers.

Even though the worker was required to pay national insurance contributions, the court stated that the purpose of the 2002 Regulations was to remove discrimination between employees in fixed-term employment and those in permanent employment; the Regulations were not to be interpreted in such a way as to remove the apparent injustice of requiring agency workers to make national insurance contributions whilst excluding them from entitlement to statutory sick pay.

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