Employment: In Depth - Managing Sickness Absence

Managing excessive sickness absence, whether it consists of persistent short-term absences or long-term illness, can be difficult. It is possible to take action in relation to employees by reason of their absence, including dismissing them, but care needs to be taken to avoid potential claims (the most common being unfair dismissal and disability discrimination). This briefing looks at the issues to consider when managing sickness absence and gives an overview of the procedure to follow before a dismissal.

Step 1: Investigate cause and likely length of absence

Once a potential problem with an employee's absence is identified, the employer should check absence records and medical certificates and refer to any applicable company sickness procedures.

The way the matter is handled will depend on whether the absence is long-term or whether it consists of persistent short-term absences. In the case of long-term absence it will normally be necessary to obtain a medical report to ascertain the extent and likely duration of the absence. In cases of short-term absence the need for a medical report may depend on whether or not the reasons given for the absences are connected or, while seemingly unconnected, indicate that there may be an underlying reason. At this first stage, a medical report from the employee's own GP may be sufficient.

It is important to establish whether or not the illness appears to be genuine as this will decide which procedure to use and which reason to rely on in any subsequent dismissal.

In the case of short-term absences it is often sufficient at this early stage to alert the employee to the fact that the absences are causing concern and that the employer is monitoring them. The employer should also explore with the employee the reasons for the absences to determine whether a medical report may be needed or whether the employee may need specific support. Many employers have found that return to work interviews, even after absences of just one or two days have helped to reduce levels of absence. Where absence is persistent, the employee should also be informed that a failure to improve could lead to more formal disciplinary action.

In the case of long-term absence, it is important to establish the reason for the absence and the likelihood of a return to work in the near future. If it is possible that the illness could be caused by the employer, e.g. work related stress, then the employer should also take action to deal with the cause (both in relation to the particular employee and taking steps to reduce risk to the workforce as a whole, if relevant). 

Step 2: Obtain independent medical advice

If the sickness absence continues, and depending on the illness in question, it may be necessary to ask the employee to attend an examination with an independent specialist doctor or occupational health expert (at the employer's expense). A report from such specialist/expert (who has not previously been responsible for the employee) is generally considered more reliable than a report from the employee's GP.

An employee needs to give his or her consent to a medical examination and for the results to be disclosed to the employer. Good employment contracts will contain a clause under which the employer can require the employee to undergo a medical examination (and for the report to be disclosed). If so, an employee who refuses a reasonable request will be in breach of contract and may in appropriate circumstances be disciplined. If the employee continues to withhold consent and provided the employer acts reasonably it may also be able to dismiss the employee fairly in these circumstances.

In addition to the contractual provisions, the Access to Medical Reports Act 1988 applies to any examination and report by a medical practitioner who is or has been responsible for the clinical care of the employee. It will therefore apply to a report from the employee's GP or consultant but not normally to a one-off report by the company doctor, occupational health doctor or independent specialist (unless such practitioner has treated the employee before). The Access to Medical Reports requires that the employee's explicit consent is sought and that the employee is informed of his or her rights in relation to the disclosure of the medical report.

Step 3: Consult with the employee

Consultation with the employee is a key element of a fair sickness procedure and should be carried out throughout the process. The bulk of the consultation is likely to take place at this third stage of the procedure and in relation to reasonable adjustments (see below) but the employee's views should be sought at the earlier stages as well.  It is crucial that the employee is consulted before any decisions are taken in relation to disciplinary action or dismissal.

Consultation involves an ongoing exchange of information and views concerning the illness between the parties and full evaluation of any available medical evidence. The employer should maintain appropriate contact with an employee on long-term sick leave, trying to strike a balance between being seen to offer support and respecting the employee's privacy. Where absences are short-term and persistent then ongoing consultation may consist of return to work interviews and more formal meetings under the disciplinary/capability procedures (to which there is a right to be accompanied), followed by warnings.

In either case, before the employer takes any action on the basis of recommendations in a medical report, the employer should discuss the report with the employee. This is the case even though an employer in possession of a medical report about an employee should act in accordance with its recommendations unless there is clear evidence contradicting them.

Where meetings are held, the employee should be given sufficient notice of the meetings and their nature. Meetings should be held at a suitable venue taking into account the nature of the employee's illness and his or her wishes (this could be the workplace, the employee's home or a neutral venue). If the meeting forms part of a disciplinary or capability procedure then the employee is also entitled to be accompanied by a colleague or trade union representative.

Step 4: Consider reasonable adjustments/alternative work

Where an employee is disabled for the purposes of the Disability Discrimination Act 1995, the employer has an absolute duty to make reasonable adjustments to prevent the disabled employee from being at a disadvantage in the workplace. However, even where the employee is not disabled, considering reasonable adjustments will form part of a fair capability procedure in most cases of long-term sickness absence, as well as in some persistent short-term sickness cases.

The employer should consult with the employee about whether any reasonable adjustments can be made to accommodate a return to work. If there is any doubt about the scope of the adjustments or whether they would enable the employee to return, medical advice should be sought.

Some examples of reasonable adjustments include staggered return to work, variation to working hours, re-allocation of duties, relocation of workstation and providing specialist equipment.

If there are no reasonable adjustments that can be made to the employee's current job, the employer should consider whether the employee could take up alternative employment (or whether there are any other possible options in the particular circumstances, which fall short of dismissal).

Step 5: Contemplate dismissal

As a last resort, an employee may be dismissed by reason of the absence. The employer should not embark on a dismissal procedure unless it has first followed the steps outlined above. The dismissal procedure should adhere to the principles of the ACAS Code of Practice. The employer may also have its own internal sickness procedures which it should follow before dismissing the employee. Bear in mind also that it may be in breach of contract, and/or discriminatory, to dismiss an employee who is receiving, or is about to qualify for permanent health insurance. Sickness dismissals are particularly fraught with difficulty and the exposure for the employer could be significant. It is important that legal advice is obtained before taking steps to dismiss an employee for sickness related absence.

An employee who is dismissed because of sickness absence may have a claim for unfair dismissal (provided they have the qualifying length of service) and/or disability discrimination (depending on the nature of the illness). In order to dismiss fairly, the employer should ensure that:

• The dismissal is for a potentially fair reason. Normally this is capability, but can also be conduct (persistent unauthorised absences for example) or some other substantial reason (as where short-term absences adversely affect the business, even though the employee is capable of doing the job). Whatever the reason, it should be identified at the outset as it may affect the procedure (and the fairness).
• The employer acted reasonably in treating the employee's absence as sufficient to dismiss. In a capability dismissal, in addition to consulting with the employee before taking the decision to dismiss, the employer should also consider:
  
   
• The nature of the employee's illness (this will normally include obtaining and considering medical advice);
• The prospects of the employee returning to work (again, medical advice is normally necessary);
• The requirements of the business (e.g. the need for the employer to have someone doing the work);
• The employee's sickness record and length of service;
• Alternative employment/adjustments to current job.
  
   
• The employee has been given sufficient warnings and opportunities to improve where relevant and been made aware that dismissal may follow.
• In a case of long-term illness, the employer should consider whether the employee may be or may become eligible for permanent health insurance or ill-health retirement.
• The ACAS Code is followed.
• If the employee is disabled it is also crucial that full consideration has been given to whether there are any reasonable adjustments that can be made. A failure to do so is discriminatory in itself even where there is no subsequent dismissal.

A disabled employee who is dismissed may have claims for both unfair dismissal and disability discrimination. An unfair dismissal is not necessarily discriminatory or vice versa but the two often go hand in hand. Compensation for unfair dismissal is based on the financial loss suffered by the employee as a result of the dismissal but is capped at £66,200 (together with a basic award based on the employee's weekly pay, age and length of service). Compensation for disability discrimination is similarly based on the financial loss suffered by the employee but compensation is uncapped and can be significant given that a disabled employee may find it more difficult to mitigate their loss by finding new employment. In addition, compensation for injury to feelings can also be awarded.

An employer who has caused the illness may be liable in a claim for personal injury (whether or not the employee is dismissed). The increasingly more common stress cases are often brought as personal injury claims.