Employment law outlook

Citation

Pitt, M. (2006), "Employment law outlook", Human Resource Management International Digest, Vol. 14 No. 2. https://doi.org/10.1108/hrmid.2006.04414bab.001

Employment law outlook

Mike Pitt, an employment-law partner at UK solicitor Pearson Hinchliffe, examines how employers can deal with employees who take frequent or long periods of sickness absence.

The average number of days’ absence per employee in the UK each year is 7.1 and the cost to employers is £11.6 billion – or £476 per head.

While nearly two in five people do not take any absence each year, some jobs and sectors are significantly more prone. Managers are less than half as likely as manual workers to take sickness absence (3.95 versus 1.63 percent) and those in the public/voluntary sector are five times more likely than workers in information technology to be off sick (7.86 versus 1.57 percent).

While 89 percent of absences are short-term, long-term episodes account for 56 percent of days lost and up to 70 percent of costs.

Many of the employers I meet tell me that they feel powerless to deal with employees who take frequent or long periods of sickness absence. But there are a number of measures that they can take to combat the problem.

First, well-drafted employment contracts and procedures outlining sickness and absence reporting and management can help to ensure that the right things are done promptly, properly and consistently. In particular, companies that organize interviews with staff when they return to work give a clear signal that they do not treat absenteeism casually. Employees will be less likely to go absent if they know that absences are monitored and followed up. Such interviews can also help the employer to spot more serious problems or illnesses at an early stage.

Second, employers can dismiss an employee who is genuinely off sick, as long as they obtain medical evidence, follow a proper and fair procedure and can show that the continued absence is commercially damaging to the business.

An employee who is persistently absent should be given a series of formal warnings that he or she could face dismissal. The employee should be given the chance to respond and be allowed an agreed period of time to improve.

Employers are not obliged to create a job for an employee who is unable to return to his or her own job. But employers must not fall foul of disability-discrimination laws. Companies do have to provide an alternative job if one is available, or make reasonable adjustments to an existing role to help a disabled employee to continue to work.

Ideally, employers should be able to trust their staff when they phone in unwell, and should seek to ensure that sick people are not encouraged to work when they are not fully fit. Good management is about identifying reasons for absence and developing a solution, rather than penalizing people who are genuinely ill.

Meanwhile, UK employees absent on long-term sick leave are still entitled to take four weeks’ holiday with pay, the Court of Appeal has ruled, provided they work at least part of the holiday year. If they are absent because of illness for the whole of the holiday year they are not entitled to any holiday pay under the Working Time Regulations 1998.

The regulations, which give all workers the right to take four weeks’ annual paid leave, are part of a series of measures designed to protect workers’ health and safety. In three conjoined appeals, employers argued that the rights being claimed by the workers in question would not further that purpose.

One employee, who had been off work for so long that his entitlement to statutory sick pay had expired, claimed pay in respect of the holiday entitlement he believed he had built up while absent from work.

Another employee, who had been off work for more than two years, told his employer that he wished to take a holiday and to be paid in respect of it.

In a third case, an employee who had worked for only 17 weeks in the relevant leave year because he had taken so much sick leave, decided to quit his job. The employer paid him his holiday entitlement on the basis of the 17 weeks he had actually worked, rather than the 11 months of the leave year that he had actually been an employee.

The Court of Appeal ruled that the entitlement to annual leave arises if a person has been a “worker” during the whole or part of a leave year. The “worker” does not have to serve a period of “working time” to become entitled to leave.

The ruling means that workers off sick can no longer give their employers notice that they wish to take a period of annual leave, even though they know they will probably continue to be sick during this period and that they have exhausted their sick-pay entitlement.

The ruling also means that workers who leave their job can no longer claim payment in lieu of unused statutory annual leave, where they have been absent since the start of the holiday year.

Employers may also have a rule whereby workers do not accrue contractual leave, which is additional to the statutory four-week minimum, during sick leave.

One unintended consequence of the Court of Appeal ruling is that employees may struggle back to work before they are medically fit because they are afraid their employer will end their contracts to avoid liability for holiday pay. It is therefore possible that workers may find themselves being dismissed because of a legal ruling that was supposed to help them.

But employers who do terminate the contract of a worker who is on sick leave must take care not to fall foul of rules on unfair dismissal.

Mike PittEmployment-law partner at UK solicitors Pearson Hinchliffe.