Sid?

Hmmm. Well, I think that essentially every character in a Mike Leigh film has some importance, such is the depth of characterisation in his films. I guess that Sid's role is maybe to show that Rachel is in a job she really shouldn't be in, and I suppose it emphasises her loneliness; she seems to have no real friends, and Sid tries to be friendly towards her, but it is tainted by his sexual advances (which perhaps emphasises his loneliness too).

I would say his character represents the logical end result of the alienation and hopelessness we see in many of the other characters, if it's not dealt with.

In other words, no matter how bad things seem right now, keep your chin up - otherwise you end up like Sid.

@simcoxk It seems like Sid is the Creepy Guy that Mike Leigh likes to put in his movies (though I've only seen three).

Naked had Mr. Landlord.
Secrets & Lies had Stuart the drunk.
AON had Sid.

I guess their purpose is to give a female character (and the audience) the heebie jeebies. Mission accomplished, Sid.