Managing Long-Term Sickness Absence & 5 Hidden Business Costs of Long-Term Absence!

Last Updated on 10 April 2024 by Rebecca Young

The UK workforce is experiencing an unexpected trend: it’s bigger but also dealing with more sickness-related absences.

There are now over 2.8 million people economically inactive due to long-term sickness, up from the previous record of 2.6 million, according to the Resolution Foundation’s analysis of new figures from the Office for National Statistics (ONS) released on the 13th of February 2024.

Employees will be sick from time to time, and time off work to recover from sickness is a right that all employees have. Hopefully, most instances of sickness absence will be short-term, but on occasions, an employee will be on long-term sick leave or absent persistently.

In this article, we look at:

• Whether employers really can just insist staff ‘get back to work’
• The role employers have in managing long-term absence
• How much sickness absence is costing your business?

Remember, this article is a guide and not a substitute for taking advice; please contact Avensure for specific advice for your business.

Supporting Staff on Long-Term Sick

What is long-term sickness absence?

Unsurprisingly, there is no definitive timeframe that sets out when short-term absence ends, and long-term sickness absence begins. Generally speaking, absences of 4 weeks or more are usually classed as a long-term absence.

Can employers insist employees return to work?

When or if an employee can return to work will depend on the illness/condition and what their GP/Specialists are advising them in terms of treatment and prognosis.

Often because there is a limit to the entitlement of statutory sick pay (SSP) which an employee receives (28 weeks), this leads to the myth employee sickness ‘entitlement’ expires at this point and the employee has to come back to work or their employment contract ‘expires’ but this isn’t the case.

When managing long-term sickness, employers must tread carefully as they have a duty of care to employees when they are at work and a duty of care when they are absent due to sickness. Employers should not try to override the advice of medical practitioners and insist the employee return to work before they are able.

How should employers be effectively managing long-term absence?

It’s important to note that a long-term absence may be due to an underlying medical condition or disability. This means that whilst frequent short-term absences may be managed via the disciplinary procedure, this will not be appropriate for disability-related or longer-term absences.

Instead, long-term absences should be managed by:

1. Regular contact with the employee via phone calls and welfare meetings

Often employees on long-term sick leave find the prospect of returning to work daunting. They feel out of the loop and isolated. This is why managing long-term absence is essential, and welfare meetings with your employees are so important.

Of course, not all employees will be able to come into the workplace, so perhaps you could arrange to speak with them via Zoom, for example. This ensures that employees continue to feel they are part of the workplace whilst they are absent and are more likely to feel less daunted at the prospect of a return after being absent for an extended period.

2. Referral to occupational health and seeking consent for a medical report

Employers are not there to medically assess their staff. If employee sickness is long-term, involves absence frequently due to an underlying medical condition or has recently been diagnosed with a medical problem and fears how this may impact their ability to carry out their role, a medical certificate is vital!

A medical report from a GP, occupational health, or another medical practitioner, such as a consultant, physiotherapist, mental health specialist and so on, can often give an insight into the changing medical needs of the employee.

This can often be the difference between someone getting early support to continue in their role via reasonable workplace adjustments or being ‘written off’ with dismissal and the employer making a hasty decision that could also leave them exposed to a disability discrimination claim.

In March 2023, the Department for Working Pensions’ Health and Disability whitepaper –was released, which outlined a raft of measures to help more disabled people and those with health conditions start, stay and succeed in work. 

3. Employee Assistance Programmes (EAP)

If an employee has poor mental health, it’s important their employer takes it seriously and with the same care as a physical illness.

There is also mounting criticism that employers are not doing enough to boost the well-being and health of their workforce. Whether that is by failing to properly explore the possibilities of workplace adjustments or failing to proactively manage employees who are on long-term sick leave.

One way employers are aiming to combat this is by investing in Employee Assistance Programmes (EAPs) for their employees.

EAP services can provide confidential advice and support in a wide range of areas, such as:

• Family- carers, child custody, relationship problems
• Health- both physical and mental health, many offer counselling services to assist with combating symptoms of depression and anxiety, bereavement, and stress
• Financial matters Addiction

Contact our Experts at Avensure for information on Zest- Avensure’s Employee Assistance Programmes programme.

Important to Note!

When it comes to Dismissal on the grounds of medical capability…

How Much Is Sickness Absence Costing Your Business?

Aside from the obvious costs associated with lost productivity, there are many hidden costs associated with failing to proactively manage sickness absence, and in this article, we expose 5 of those hidden costs and what employers can do about them.

1. Annual leave accrual

Someone who is on long-term sick will continue to accrue annual leave during their sickness absence. This is because annual leave and sickness absence serve two different purposes:

• Sickness absence is to allow the employee to take time away from work to recover from their illness. During this time off, the employer still has a duty of care, which includes keeping in touch with their employee and the employee should take this time to do all they can to try and get themselves well enough to return to work.
• Annual leave is to allow the employee to take breaks away from the workplace and is a form of rest.

Many employers do not separate the two and assume that if someone has been on long-term sickness absence, this constitutes ‘rest’ from work and the right to their annual leave is lost. This is not the case.

Employees will continue to accrue their annual leave entitlement* when absent due to sickness, even if their absence has taken them across more than one holiday year. So, the usual mantra of ‘don’t book it, you lose it’ won’t apply.

*This is also the case for employees on maternity/adoption/parental/shared parental/parental bereavement leave.

2. Sick Pay

Employees are entitled to statutory sick pay (SSP), which they can claim for up to 28 weeks. However, this doesn’t mean that there is a ‘limit’ to sickness absence and that their employment will end after this point.

SSP rules at a glance:

The rate of SSP increases every year! The 2023 rate is £109.40 per week.

• SSP is payable for 28 weeks
• There is no qualifying service required, although the employee must have done some work for the employer.
• Payable to those who earn above the lower earnings limit of £123 per week (2023/24)- this is based on the average earnings over the previous 8 weeks.
• Payable only after 4 continuous days of sickness absence
• First 3 days are unpaid ‘waiting days’

If you operate a company sick pay scheme, this will be payable to the employee, and then any entitlement to SSP will apply.

If your company sick pay is not inclusive of SSP, the full SSP entitlement may also be payable after the company sick pay entitlement has ended.

3. Increased Payroll Costs

When employees take sickness absence, and this absence is likely to become long-term sick leave, the employer can employ cover on a temporary basis until the original post holder is ready to return to work.

There is, however, an increased cost associated with employing someone on a temporary contract and paying the absent employee their sick pay. The person on a temporary contract will also accrue annual leave and could end up going off sick themselves.

It may be that you can’t afford to employ a temporary replacement, but you are still facing the cost associated with the drop in productivity generated by an absent employee. This is where employers look to the rest of the workforce to cover.

This can result in higher payroll costs of overtime, especially if you pay overtime at a higher pay rate.

4. Staff Morale

Employees know that their colleagues will be absent due to sickness from time to time, they will be absent themselves at some point, so covering for absent colleagues is just one aspect of working life.

However, where the employer is not managing sickness absence in the organisation, this can have a damaging impact on the rest of the staff.

• Employees can face burnout, which in turn can increase the likelihood of them being absent due to sickness or their own productivity and performance being affected.
• Employers who don’t manage sickness absence find that they have high sickness absence levels generally and this will hit your finances.
• Employees constantly being asked to cover for their absent colleagues may start to feel undervalued and this can result in a higher staff turnover, which in turn reduces staffing levels even more and impacts on your recruitment costs.

5. Employment Tribunal Claims

There are many hidden costs associated with employment tribunal claims arising out of dismissals linked to ill health/absence.

Medical capability (a dismissal on the grounds of ill health) is one of the 5 fair reasons for dismissal, but that in itself will not automatically justify a dismissal for this reason and the risk of an unfair dismissal claim cannot be ignored. To put this into perspective. The highest award in an unfair dismissal claim in the 22/23 reporting period is £184,200. While unfair dismissal claims are usually subject to a statutory cap, this case will have been one of the exceptions where the cap does not apply (i.e. whistleblowing or health and safety-related dismissals).

How tribunals award against employers for unfair dismissal will be case specific, but they are usually made up of a basic award- which is calculated based on the statutory redundancy entitlement and compensatory awards, which are subject to a cap (in 2023/24, the maximum compensatory award figure is £105,707, (previously £93,878).

Where health is concerned, the added risk, particularly with someone off on long-term sick leave, is that they may meet the definition of disability under the Equality Act. This exposes the employer to the risk of a discrimination claim; the compensatory awards for discrimination claims are uncapped. The costs of failing to manage sickness absence and the ultimate costs of managing it unlawfully are costs employers cannot afford to ignore.

And finally,

It’s important that employers do not put pressure on employees to return to work when they are not well enough or if it is unsafe for them to do so.

If you are experiencing problems due to high levels of general absence, persistent absence or someone is on long-term sick (or is likely to be so)- don’t delay, call Avensure at the earliest opportunity and keep us updated on any developments so that we can assist you in adhering to your duty of care and keeping those costs to a minimum. Click here: Avensure Contact!

As always, this article is a guide and not a substitute for taking advice; please contact Avensure for specific advice for your business.