Navigating sickness absence – what do you need to know?

Why it's important

Employee sickness absence is at the highest level for over a decade, according to the CIPD's Health and wellbeing at work survey 2023. The average rate of employee absence is now 7.8 days per year. Mental ill health is the biggest cause, followed by musculoskeletal injuries, acute medical conditions and stress.

COVID is still having an impact too: half of all organisations have employees with long COVID, and the number of people inactive for health reasons has increased by a third since the pandemic to 2.8 million. Ill health absence has an impact on all organisations and it's important to know what you can do to manage it.

What is the risk of claims?

Employees who are off sick may have several potential employment law claims, the most common being unfair dismissal and disability discrimination.

An employee could bring a claim for unfair dismissal if they are dismissed - they will normally need two years' continuous employment to qualify (although that is likely to change with the new Government). To be able to successfully defend the claim, the employer would have to establish a fair reason for termination and follow a fair procedure.

A sickness dismissal will usually be for capability (on the grounds that the employee is unable to do their job) or conduct (if they have taken persistent unauthorised absences). The maximum compensatory award for unfair dismissal is currently £115,115 or 52 weeks' actual gross pay (whichever is lower) and successful claimants would also receive a basic award (calculated in the same way as a statutory redundancy payment).

An employee who is disabled under the Equality Act 2010 may also have a disability discrimination claim with the most common ones being discrimination arising from disability and failure to make reasonable adjustments. There's no cap on compensation for discrimination, which can include a sum for injury to feelings as well as financial loss.

Less common claims include personal injury, constructive unfair dismissal and breach of contract.

Getting the procedure right

Whether you're dealing with long-term or short-term absence, it's crucial to follow the right procedure. In all cases, you should keep records of discussions you hold with the employee, the decisions you make and the reasons for them.

Where an employee is on long-term absence you should investigate the cause and likely length of their absence, obtain medical evidence and consider a referral to occupational health (OH). You should keep in touch with the individual and hold meetings with them to discuss their absence and possible return to work.

When they're ready to come back, consider whether any reasonable adjustments need to be made to their role. Monitor their return and provide support if necessary. If you're considering terminating their employment, investigate other options first - such as whether you can make a claim under a permanent health insurance scheme or whether the employee can take ill health retirement.

If you do operate a permanent health insurance scheme there are particular risks to any dismissal process and you should always seek legal advice.

Your approach will be different in cases of short-term absence. You should find out if there's an underlying medical reason (which may require OH input) then meet with the employee and set a timescale for improvement. You may need to hold further meetings and issue formal warnings to the employee if there's no improvement, which could lead to their dismissal on notice.

You will be in a stronger position to do this if you have published guidance on attendance standards and clear triggers for action, although you will always need to consider whether adjustments are required for disability related absence.

If you suspect the absence isn't genuine, this could be misconduct and you should deal with it under your disciplinary procedure.

Absence management tools

There are several practical steps you can take to reduce levels of sickness absence, including:

• Requiring employees to call their line manager if they're off sick (instead of emailing their line manager or contacting HR)
• Carrying out return to work interviews. The line manager meets the employee to ask what was wrong, whether they've completely recovered and if they need any support
• Have clear rules on when employees should be referred to occupational health
• If you can afford it, offer private medical insurance and/or permanent health insurance – if you do, make use of any early intervention tools offered by your provider
• Offer an Employee Assistance Programme and ensure it is well publicised – if employees know how they can obtain support with their mental health that may help prevent absences arising
• Rewarding good attendance, although this can lead to presenteeism and you should exclude disability and pregnancy-related absence in order to avoid discrimination
• Recording absence and analysing patterns – you may be able to spot patterns, such as the colleague who regularly takes a Friday off sick before a bank holiday weekend or is absent on a day when they requested holiday but it was rejected
• If practicable, allowing a level of hybrid or flexible working – if employees are able to control when and where they work that may reduce sources of stress
• Offering a limited number of personal days (or duvet days), which employees can take without prior notice. This can be disruptive to the business and a better option might be to have a bookable wellbeing day.

Which steps are the most successful? The most effective ways of managing long-term absence include involving OH professionals and being able to assist employees in seeking treatment or finding someone to talk to. Asking line managers to carry out return to work interviews has the biggest impact on short-term absence.

Proposed changes

It's too early to know if the new Labour Government will make any changes to the law in this area. However the Labour Party published a Back to Work Plan in May, which set out a number of steps it intended to take to decrease economic inactivity. These included bringing down NHS waiting lists so that people weren't stuck out of work due to sickness, providing access to specialist mental health support in every community and overhauling Access to Work for disabled people.

Sickness absence is a tricky area to navigate and the stakes can be high if you get it wrong. We have a dedicated team of specialist employment lawyers who can help, so please get in touch with a member of the employment team.