Off Sick During Redundancy Notice In The UK: What Employers Should Do

Redundancy is hard on any team - and it can get even trickier when an employee goes off sick during their redundancy notice period.

As an employer, you still need to follow a fair process, pay people correctly, and avoid discrimination risks. The good news is that with a clear plan and a basic understanding of the rules, you can handle this lawfully and with compassion.

In this guide, we’ll walk you through what to do if an employee is off sick during redundancy notice, how notice pay works, consultation best practice, and the key risks to watch for under UK law.

Can You Proceed With Redundancy If Someone Is Off Sick?

Yes - being off sick doesn’t prevent you from continuing a fair redundancy process. Redundancy is about the job disappearing (or business closure), not the person’s health. However, sickness absence affects how you consult, pay, and support the employee during their notice period.

Your responsibilities are to:

• Continue a fair and transparent redundancy process, including meaningful consultation.
• Make reasonable adjustments to the process if the sickness is a disability under the Equality Act 2010 (for example, offering remote meetings or extra time to respond).
• Avoid unfair or discriminatory selection criteria (for example, penalising disability-related absence without adjustment).

If your timelines are tight, don’t rush. A short extension to enable proper consultation is often the safer approach, especially where health is involved. If you’re unsure how far to adjust, tailored advice on ending an employment contract fairly can help you keep the process on track.

How Should You Run Consultation While The Employee Is Off Sick?

You still need to consult, even if the employee is absent. Consultation should be genuine - you’re asking for input, exploring alternatives, and considering ways to avoid or reduce redundancies.

Reasonable Adjustments To Consultation

• Offer remote meetings (video/phone) instead of in-person.
• Allow a companion (colleague or trade union representative) if requested.
• Provide documents in accessible formats and give reasonable time to respond.
• If the employee is too unwell to engage at that moment (supported by medical evidence), consider pausing consultations for a short period.

Be careful if absence is disability-related. Using absence records as a selection criterion can be discriminatory unless you adjust for disability-related absences and apply objective, evidence-based criteria.

If the employee’s fit note suggests they’re not able to attend meetings, think creatively: written questions, asynchronous feedback, or shorter calls. Where there’s doubt about capacity to engage, it’s sensible to rely on medical evidence - and remember, there are legal risks if you ignore a doctor’s note. See our guidance on doctor’s sick notes.

Notice Pay When Someone Is Off Sick: What Does UK Law Require?

This is where many employers get caught out. The pay rules during notice depend on whether you provide statutory minimum notice only, or a longer contractual notice. The Employment Rights Act 1996 (particularly the “statutory minimum notice pay” rules) sets out important protections.

1) Statutory Minimum Notice And Sick Leave

If the employee is receiving notice and, at that time, they’re not working because of sickness, section 88 ERA 1996 can entitle them to their normal pay for the statutory minimum notice period - not just Statutory Sick Pay (SSP) - provided certain conditions apply.

Key point: If your contractual notice is the same as the statutory minimum notice (or less), the employee is generally entitled to normal pay for the statutory minimum notice period even while sick.

2) Contractual Notice One Week Longer Than Statutory

If your contract gives at least one week more notice than the statutory minimum, the special statutory “normal pay” rule won’t apply. In that case, pay during notice follows your normal sick pay arrangements - e.g., company sick pay if available, or SSP only if that’s what they’d otherwise get.

3) Practical Examples

• Example A: Employee has 3 years’ service. Statutory notice is 3 weeks. Your contract provides 3 weeks’ notice. During sickness, they’re entitled to normal pay for those 3 weeks under the statutory minimum notice pay rules.
• Example B: Employee has 3 years’ service (3 weeks’ statutory). Your contract provides 4 weeks’ notice (one week more). During sickness, they receive whatever they’d normally get while sick (company sick pay/SSP), not guaranteed normal pay.

4) Payment In Lieu Of Notice (PILON) And Garden Leave

• PILON: If your contract allows you to make a payment in lieu and you choose to do so, you pay the contractual PILON amount. The special statutory “normal pay” rule generally doesn’t apply because employment ends immediately.
• Garden Leave: If they remain employed and on notice (but not working), the same notice pay principles apply as above (statutory vs contractual rules).

Getting the notice pay wrong can lead to unlawful deductions or breach of contract claims. If you’re unsure which rule applies, reach out for Redundancy Advice.

Redundancy Pay, Holiday And Other Entitlements While Off Sick

Statutory Redundancy Pay

If the employee has at least two years’ continuous service, they’re likely entitled to statutory redundancy pay. Being off sick doesn’t remove that entitlement.

Redundancy pay is calculated based on a “week’s pay,” subject to the statutory cap. If the employee’s pay has been reduced due to sickness, you usually look to their normal week’s pay rather than their sick pay level. Some employers also offer enhanced redundancy pay under company policy or custom and practice - check your contracts and handbook for any promises already made.

Accrued Holiday

Holiday continues to accrue during sick leave. On termination, you must pay for accrued but untaken statutory holiday entitlement. Employees on long-term sick can sometimes carry over statutory holiday - factor this into your final calculations.

Company Sick Pay And SSP

Follow your contract and any policy for company sick pay. Where company sick pay isn’t available, SSP may be payable provided eligibility criteria are met. For managers, it’s helpful to have a single point of truth in your Employment Contract and staff policies, so everyone knows the rules up front.

Deductions And Overpayments

If you’ve accidentally overpaid during sickness or notice, you can sometimes correct this via payroll - but only make lawful deductions and give clear written explanation. Where sums are disputed, it’s often safer to agree a repayment plan than to make unilateral deductions.

Selection Criteria, Disability And Discrimination Risks

When an employee is off sick, discrimination risks increase - especially if the sickness is related to a disability. Under the Equality Act 2010, you must not discriminate because of disability and you must make reasonable adjustments to remove barriers in your process.

Fair Selection When Absence Is A Factor

• Use objective, business-led criteria (skills, qualifications, performance, genuine needs) and avoid simplistic “absence totals” that penalise disability-related absences.
• If attendance is a legitimate criterion, discount disability-related absences and pregnancy-related absences to avoid discrimination.
• Document how you’ve applied criteria and any adjustments made.

Be mindful that long-term sickness and capability concerns are different legal issues from redundancy. If you’re considering capability dismissal instead of redundancy, read our guide to long-term sick leave dismissals and make sure you separate the processes.

Process Checklist: Managing Redundancy When The Employee Is Off Sick

1) Confirm The Genuine Redundancy Situation

Make sure you can clearly explain the business rationale - restructuring, falling demand, location closure, or technology changes. Redundancy should not be used to disguise a sickness/capability dismissal.

2) Prepare Your Documentation

• Contract and policies: Check notice clauses, PILON, sick pay, redundancy policies, and selection criteria.
• Business case: Short, plain-English summary of why roles are at risk and what alternatives you considered.
• Consultation plan: Timelines, attendees, meeting options (remote), and adjustments if needed.

3) Start Meaningful Consultation

• Invitation letter setting out the risk of redundancy, proposed criteria, and the meeting format (with adjustments).
• Offer companion rights and share the selection matrix in advance if possible.
• Hold at least two consultation meetings and genuinely consider feedback and alternatives.

4) Apply Selection Criteria Fairly

• Score against objective, evidence-based criteria.
• Adjust for disability-related absence where appropriate.
• Keep detailed notes - these are crucial if decisions are later challenged.

5) Confirm The Outcome And Rights Of Appeal

• Issue a clear outcome letter explaining the decision, notice arrangements, pay, redundancy pay (if any), and the right to appeal.
• If you’re paying PILON, set this out and explain final salary, holiday pay, and any deductions with amounts.

6) Calculate Final Pay Correctly

• Apply the correct notice pay rules depending on statutory vs contractual notice.
• Include statutory redundancy pay (if 2+ years’ service) and accrued holiday.
• Check if any severance vs redundancy terminology in your policies changes the overall package.

7) Keep Data And Medical Information Secure

Handle fit notes and any medical reports sensitively and in line with data protection law - limit access to those who need to know and store records securely.

Common Pitfalls To Avoid

• Rushing consultation because the employee is off sick - this increases unfair dismissal risk.
• Failing to adjust selection criteria for disability-related absences - a common source of discrimination claims.
• Paying only SSP during statutory minimum notice when normal pay is due under the ERA 1996 rules.
• Overlooking accrued holiday during long-term sickness - statutory holiday still accrues.
• Using redundancy as a proxy for a capability issue - keep processes distinct and well documented.

If the employee has been off for an extended period, it’s also worth reviewing your approach to long-term sick pay and absence management to ensure consistency with your redundancy decisions.

FAQs For Employers

Does Statutory Redundancy Pay Change If The Employee Is Off Sick?

No. Eligibility (2+ years’ service) and calculation rules still apply. You’ll calculate a “week’s pay” using the ERA 1996 rules, generally based on normal pay rather than reduced sick pay, subject to the statutory cap.

Can We Pause A Redundancy Process Because The Employee Is Off Sick?

Yes, if there’s medical evidence they can’t meaningfully engage right now, a short pause may be reasonable. Keep the pause proportionate and keep communication open.

Can We Pay PILON To Avoid Complex Notice Pay Rules?

Only if your contract allows it and it’s appropriate in the circumstances. PILON can simplify pay calculations but you still need a fair process and a lawful redundancy rationale.

What If Sickness Is Long Term?

Long-term sickness needs careful handling. Capability and reasonable adjustment duties might apply alongside redundancy planning. Start with a fair process and, if needed, take advice on capability or what employers can do when staff are off sick.

Key Takeaways

• You can proceed with a genuine redundancy while an employee is off sick, but you must consult fairly and make reasonable adjustments where appropriate.
• Notice pay during sickness depends on statutory vs contractual notice: if your contractual notice isn’t at least one week longer than statutory, the employee is usually entitled to normal pay for the statutory minimum notice period.
• Pay statutory redundancy pay (if 2+ years’ service), accrued holiday, and any contractual entitlements - sickness doesn’t remove these rights.
• Avoid discriminatory selection criteria: adjust for disability-related absences and keep your criteria objective and evidence-based.
• Document your rationale, consultation steps, and decisions - clear records are your best defence if challenged.
• If you’re unsure, get tailored guidance. A short conversation can prevent costly mistakes around notice pay, consultation, and selection.

If you’d like help navigating redundancy when an employee is off sick - from consultation letters to pay calculations - our team can support you. Reach us on 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.

Related guides and services: Redundancy Advice | ending an employment contract fairly | long-term sick leave dismissals | enhanced redundancy pay | Employment Contract