Legal – Managing absence

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As the economic conditions have taken their toll on employees’ physical health, Piers Leigh-Pollitt, partner at Doyle Clayton Solicitors, takes an overview of the issues involved in both short and long term sickness leave

Key learning points:

  1. Short-term absences may signal bullying or harrassment issues
  2. Numerous absences may mask a hidden medical issue
  3. Do not force employees to take holiday time during sick leave
  4. Ensure long-term absence cases are health monitored on returning

With the annual cost of sickness absence costing UK businesses some £17bn a year, it is little wonder that managing workplace absence remains a significant issue for most employers, particularly in recessionary times.

Here are a few of the common issues we see cropping up again and again.

Short-term absences

Short-term absences continue to prevail in most organisations. There are still lots of people taking the odd day off for trivial reasons, but how can you tackle that type of absence? The following range of measures may help to reduce short-term absence level.

  • Back-to-work interviews: Many organisations have seen a large drop in casual absences following the introduction of back-to-work interviews because people are less likely to take the odd day off if they have to explain themselves to someone on their return.
  • Check for patterns emerging: Is there a rise in absences following work events or national sporting events? If so, employers might wish to consider reminding people of their obligations before such events take place. Some organisations accept this as an inevitability of life and allow some degree of flexibility following events, provided the hours are made up at some other time.
  • Incentives: Consider rewarding ‘no absence’ levels at all throughout the year with incentives (eg, vouchers, small cash payments or an additional day or two of holiday).

Following back-to-work interviews, employers may uncover some rather uncomfortable truths, but it is always better to tackle these head-on. Sometimes short-term absence results from bullying or harassment in the workplace, and these sorts of allegations will need to be addressed immediately. Similarly, in some cases, short-term absences may be masking a more deep-seated medical issue, in which case it may be necessary for an employer to send the employee to a medical expert to obtain a medical report.

Long-term absences

A familiar scenario involves the employee who sends in successive doctor’s notes for months on end and sometimes it becomes very difficult for them to resume work. The employer needs to understand the reason for the absence and how long their absence is likely to last. Employers should try to make contact with the employee as soon as possible to offer support and arrange a home visit. The employer should then try to obtain a medical report from Occupational Health or the employee’s GP, as this will help the employer to know what measures should be put in place to ease the employee back in to work (eg, phased return to work, revised working hours or duties).

Reasonable adjustments and sick pay

Another frequent question is whether extending company sick pay (once it has been exhausted) would be considered a reasonable adjustment to make for disabled employees. The answer is: only rarely. In one case (Nottinghamshire CC v Meikle), the Court of Appeal held that where a disabled employee was absent from work as a result of her employer’s failure to make reasonable adjustments, the decision not to extend the provision of sick pay to her (after the contractual entitlement came to an end) amounted to unlawful discrimination. She was awarded £196,000 in compensation, part of which represented her unpaid sick pay. However, in another Court of Appeal decision (O’Hanlon v Commissioners for HMRC) the reason for the employee’s sickness was not because of the employer’s failure to implement reasonable adjustments, so there was no requirement to extend company sick pay for the duration of the absence.

This has been followed more recently in the EAT (RBS v Ashton), where it was also held that only in exceptional cases would the withholding of sick pay in accordance with a sickness absence policy amount to a failure to make reasonable adjustments.

Long term sick leave and benefits including holiday pay

Following the European Court of Justice (ECJ) decision in HMRC v Stringer the case was remitted to the House of Lords to rule on the rights of UK employees on long term sick leave. The House of Lords found that such employees are allowed to take and be paid for their statutory holiday entitlement.

In light of the ECJ decision in Pereda v Madrid Movilidad SA, employers should also be careful when trying to force employees who are off sick to take holiday against their wishes during their sick leave. Pereda held that if the employee decides not to take their holiday during their sick leave, they must be granted holiday at a different time, even if this would mean that the holiday is carried over to the next leave year.

This approach contradicts the Working Time Regulations, which state that any untaken holiday generally cannot be carried over to the next leave year. In Shah v First West Yorkshire Limited, the Tribunal concluded that Pereda should be followed, but we will be checking for future cases on this point. In light of the uncertainty, many employers are operating a ‘use it or lose it’ policy, relying on the specific wording under the Working Time Regulations which prevents carrying forward holiday from one year to the next.

Returning to work

As a result of the recession and fears over job security, employers have seen a significant rise in sickness presence at work (known as presenteeism) whereby sick employees attend work. Employees are still entitled to be paid in full even if the employer wants to obtain confirmation from Occupational Health that they are fit to return to work before allowing them to do so. If the employee is not fit to return to work then, provided it is reasonable for the employer to rely on the Occupational Health evidence, the employer can insist the employee stays/returns home on the same level of sickness benefits they were previously receiving.

However, following the introduction of ‘fit notes’, a number of GPs are signing employees back to work on the basis that they ‘may be fit for work taking into account the following advice…’ The key issues to consider here are as follows:

  • Reasonable adjustments: If you are dealing with a (potentially) disabled employee, steps must be taken to ensure that all necessary reasonable adjustments are made to their employment in preparation for their return to work (eg, staggered working hours).

Even if it is not an express contractual right, employers should consider whether their company sick pay clause may be deemed an implied contractual term

  • Monitor and manage appropriately: Once the employee is back to work, it is important for employers to monitor the employee’s health to ensure that they are fit (mentally and physically) and able to resume their duties.
  • Carry out a risk assessment: This will enable employers to ascertain if the sick employee might cause harm to others while at work.

Changing contractual or discretionary sick pay policy

Some employers believe their generous company sick pay schemes are only adding to the problem of frequent or lengthy absences. But if employers are looking to change their sick pay rules, they need to consider the ramifications. This can be quite a radical step. Employers looking at changing their company sick pay policies should consider whether the company sick pay clause is a contractual right. Even if it is not an express contractual right, employers should consider whether their company sick pay clause may be deemed an implied contractual term. In particular, employers should consider:

  • Where is it contained?
  • The wording of the clause — is it contractual in nature?
  • Has company sick pay been granted to employees for a number of years and has it been applied consistently and without variation?
  • Are employees aware of the clause?

If the company sick pay clause is contractual (expressed or implied), there are a variety of methods to effect the change, for example:

  • Express agreement: The ideal is to obtain the employees’ voluntary agreement through consultation.
  • Unilaterally impose the change and rely on the employees’ conduct for acceptance: Employers can make the change regardless of whether the employees accept the change and then seek to rely on their conduct as ‘implied’ acceptance to the change. However, the risk is that some employees may resign, claim constructive dismissal and seek reinstatement on their old terms and conditions.
  • Dismiss and offer re-engagement on the new terms: An employee who refuses to agree to a contractual change and who resigns in protest may claim constructive dismissal, or unfair dismissal if he or she is dismissed on notice. The dismissal may be fair for “some other substantial reason”. If the employer proposes terminating the existing contracts of 20 or more employees it must notify the Secretary of State and comply with the collective consultation obligations under the Trade Union and Labour Relations (Consolidation) Act 1992.

While there is no easy, quick solution for managing absences in the workplace, there are a range of measures that can be taken to minimise the impact of absences and help employees return to work when they are fit and able to do so.

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