The cost of doing business crisis | Managing staff on long term sickness absence

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As the cost of doing business crisis continues, employers are trimming down on spend and looking for ways to get the most out of their team. This means ensuring everyone is present and performing at their best.

Of course, part of this is managing long-term sickness absence. Having a member of staff on leave for an indefinite period can be a drain on productivity and resources and many businesses simply can’t shoulder this additional expense right now.  

As well as paying SSP, having an employee on long-term sick could mean paying for temporary cover. It could also cost your business in other ways, namely lost productivity and added strain on other members of staff who end up carrying the extra load.

And it’s a growing problem. According to the Office for National Statistics, the increase in long-term sickness started pre-pandemic in 2019 then rose sharply, with the number of people economically inactive due to long-term sickness reaching a record 2.5 million between June and August 2022.

Unfortunately for employers, long-term sickness is one of the most difficult kinds of absence to manage, especially for smaller organisations with smaller teams and less-flexible finances.

Our colleagues at WorkNest, are seeing more enquiries from employers who are keen to progress situations forward before the year ends – whether that’s accelerating a return to work or, if it becomes clear that there’s no reasonable prospect of a return, going down the medical capability dismissal route.

Capability dismissal; an alternative to redundancy?

While WorkNest report that most employers aren’t using capability dismissal as an alternative to redundancy, it’s fair to say businesses are feeling the pressure of the economic climate, and therefore needing to be proactive in managing their employee relationships.

After all, the single biggest cost to any business is the labour cost. In fact, on average, it makes up 70% of a business’ overall expenditure.

As such, businesses are acutely alert to the impact that absence is having on business efficiency and other colleagues’ workloads. Especially where there are favourable sickness payment schemes, they will want to keep on top of managing absence to ensure there’s no abuse of the system available.

However, as a general rule of thumb, unless there is early medical evidence that confirms an employee isn’t going to be fit to return to work for a long time, it’s unlikely that it will be reasonable to progress with an ill-health dismissal before six months of absence.

The causes of long-term absence

According to CIPD, the most common reasons why employees take a long-term leave of absence include mental ill health, musculoskeletal conditions and stress – which is perhaps unsurprising given the various stressors people are facing right now, including the cost of living crisis. Echoing the CIPD’s findings, absences due to back pain are also common.

Many of the reasons for long-term absence may raise issues of disability, if the employee’s condition has a “substantial and long-term adverse effect” on their ability to carry out “normal day-to-day activities”. This can make dismissing those on long-term sick risky, given the potential for discrimination claims.

What can employers do?

When an employee has been off work for a long period of time with no clear sign of when they will be able to return, it can feel as though your hands are tied.

You’ll no doubt want to move the situation forward, particularly given the costs involved, but at the same time you might be worried about legal missteps or making the situation worse. In many cases, employers simply don’t know what to do for the best.

In these scenarios:

  • Keep in regular contact
  • Obtain medical evidence
  • Decide whether there’s a reasonable prospect of return

As a minimum, a welfare meeting once a month will enable you to regularly explore the reasons for the absence, how any medical intervention is assisting the employee in their recovery, and whether there’s anything you can do to support them in returning to work sooner. Note that as the employer, it’s up to you to seek out this information – it’s not the employee’s responsibility to update you.

Before you dismiss, beware…

Before considering progressing to a potential dismissal, it’s important to:

  • Consider reasonable adjustments to assist the employee in returning to work, i.e. changes to their job or potential redeployment.
  • Consider any benefits that may be available. For example, do they qualify under any permanent health insurance or ill-health pension provisions?

It’s important to consider these points before progressing to a potential dismissal as this can reduce the risk of unfair dismissal and discrimination claims, as well as potential breach of contract, which could arise if you haven’t fully explored contractual benefits.

Of course, prevention is often better than cure. There are a few things you can do to reduce long-term sickness absences and their impact on your business, including:

  • Creating a formal policy to show employees that you take absence seriously and set out how long-term sickness will be dealt with;
  • Conducting risk assessments to identify and reduce any risks that may be contributing to such absences, such as unreasonable workload demands;
  • Maintaining regular contact with employees when they are off sick; and
  • Conducting return to work interviews after each absence to make sure employees really are well enough to return to work, identify absence trends and deter bogus absences.

Get absences under control with Youmanage

Youmanage gives you the tools you need to oversee sickness, annual leave requests, TOIL and overtime, all in one secure system accessible by employees and managers alike.

Our leave of absence monitoring system offers a range of features essential to the effective absence management of any business.

Calculate entitlement automatically – including pro-rata for part-time employees – and combine with reporting for useful insights into absence trends across your business.

To find out how our fully configurable platform can help bring absences under control, try Youmanage for yourself – free for the first 30 days. Or, you can request a free online demo with one of our team who can walk you through the system.