Employment Law Reforms on Sickness Absence

Date Added: 02 December 2011

In February 2011 the government initiated a review of sickness absence procedures.   The review was aimed at identifying ways of minimising workplace sickness absence and the cost of ill health on individuals, employers and the taxpayer.

On 21 November 2011, the report, ‘Health at work – an independent review of sickness absence’ was published.  Some of the proposals will put pressure on individuals to return to work.

The Recommendations:-

Establish a new Independent Assessment Service (IAS)

The primary role of General Practitioners is the care and treatment of their patients.  General Practitioners do not have strong incentives to consider state and employer costs.  Moreover, employers actually rely on the fit notes provided by General Practitioners as justification of sickness absences of over seven days.  Employers also rely on these fit notes to identify employees with health conditions which limit their capacity to do the job, but who could work if given adequate assistance.

Many employers do not have the resources for their own occupational health services and therefore need independent advice on employees’ health and whether they can be supported in a return to work.  The review recommends that, after an employee has been absent for four weeks, they are referred to a new government-funded IAS for expert advice.  The IAS would be run by approved health professionals.

The report also recommends that the government should revise its fit note guidance.  General Practitioners should consider an individual’s capacity to return not only to their own job, but also to work more generally.  The suggestion is for ‘may be fit’ certificates to be used for those employees with a reasonable level of capability to return to work and ‘not fit’ certificates, for those who cannot undertake any work.

Improve employers’ management of sickness absence

The report suggests that sickness absence can be reduced through good management and early intervention.  In particular, the importance of better and more accessible guidance on helping employers understand the law on sickness absence and by dealing with the growing problem of stress and mental health conditions.

Good management might necessitate setting targets and trigger mechanisms.  These would take the form of sickness absence targets and return-to-work interviews, some of which many organisations have already implemented.  Another is access to occupational health, particularly in relation to long term absence.  Lack of access to occupational health, especially amongst smaller businesses, has often been seen as a significant barrier to good sickness absence management.

The legal issues

The report recommends that employers use their absence management policies to explain the processes they intend to follow and ensure that all employees are aware of and familiar with them.  In addition the Employment Law Review should be used to address other issues relating to sickness absence, such as making it easier to end an employment relationship.  There is need for a new, more streamlined solution rather than the current expensive, compromise agreements that are in place.   The introduction of set figures, laid down in law will help with this.  Principally, in scenarios where an employer is unable to make reasonable adjustments to the workplace or job descriptions or where the employee is assessed as conditionally fit for work, but does not want to return.  This would help the parties reach a satisfactory settlement without protracted delays and indirect costs to the employer.

Another recommendation is the use of ‘protected conversations.’  These would enable employers to have an ‘honest, without prejudice conversation with their staff.’  Currently the regulatory framework results in businesses taking a very risk-averse approach to communicating with their employees.

In addition, the government are encouraged to reconsider the ban on pre-employment health questionnaires.

Tax relief to help employers support sick employees

Larger employers and public sector employers are more likely to offer occupational health services and high net worth individuals are more likely to have the means to fund private health care.  Whereas, employees at smaller companies and the less well remunerated are more likely to be excluded from interventions that help them get back to work.  To this end, the report recommends retaining tax relief on employee assistance programmes (EAPs). EAPs give effective advice and counselling on the most common issues causing absence and performance problems.  The second recommendation in this area is the introduction of tax breaks for employers’ expenditure on medical treatments or vocational rehabilitation, which supports sick employees return to or remain at work.  In particular the tax relief should be directed at basic rate tax payers.

Help long term sick employees return to work for a new employer

Some employees’ long term health conditions make it impossible for them to return to their old job.  New employment is not considered until they have entered the benefits system.  An employer has two options once it is confirmed that an employee will not be able to return to work; dismiss on health grounds or continue to pay sick pay until the employee’s eligibility runs out.

However the report puts forward a third option; access to a voluntary job-brokering service to get the employees a new job.  Employees who have been absent from work for 20 weeks or more and who do not have the option of taking a different position with their current employers, should be helped to find new employment before they enter the benefits system.  The service would be free to the long term sick but available earlier if employers are willing to pay for it.  The employee would continue to receive sick pay from their employer whilst concurrently accessing the job-brokering service.

We will continue to keep you abreast of the proposed reforms and provide updates as and when they are implemented.  For assistance with any employment law queries please contact Martin Stevens, Darren Thorneycroft or Marcus Self.

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