Employers must be wary when tackling sick leave

Businesses are haemorraging billions of pounds because of real and invented
sick leave, but schemes to cut absence rates can sometimes exacerbate the

The CBI estimates that sick leave costs business about £11bn each year, with
staff taking a remarkable 166 million sick days.

A few years ago, some employers dipped their toes in the transatlantic
waters by adopting a US concept of ‘duvet days’. Instead of having to book
holiday in advance, or invent an attack of ‘food poisoning’, workers could
legitimately convert a number of single days’ holiday to casual paid leave by
simply ringing up on the day to say they wouldn’t be in. While that no doubt
discouraged workers to lie about why they wanted time off, it had the potential
to cause havoc by increasing incidences of unplanned absence.

The UK’s growing absenteeism culture has recently hit the headlines again.
In the same week that Tesco announced the introduction of various voluntary
pilot schemes aimed at reducing staff absenteeism, a survey by the Foreign
Office revealed that 40 per cent of those interviewed would be prepared to
‘take a sickie’ to go to Euro 2004.

Although the Tesco scheme has received a fanfare, the supermarket is
following – no doubt cautiously – in the footsteps of other employers who have
already trodden this path. Schemes in operation include not paying sick pay for
all or part of the first three days of sickness (the days when no statutory
sick pay (SSP) is payable). Another is the ‘stick and carrot’ approach, where
staff are given a few extra days’ holiday (but lose them if they take days off
sick) or other rewards for good attendance.

Critics of such schemes highlight the potential to penalise staff on lower
incomes who are genuinely sick, but who will force themselves to go to work to
avoid loss of income. They point out that this could also slow down the
recovery process and cause germs to be needlessly spread to others, thereby
exacerbating the problem.

Forms of incentivisation may alleviate this effect, but what about the
perception of unfairness when a worker who takes a day off with a nasty 24-hour
tummy bug is treated in exactly the same way as an employee nursing a hangover?
And what happens after the unpaid days have passed? If, by staying away for a
longer period, the employee gets back pay for the unpaid days, that may
encourage workers to take even more time off than they might otherwise have
done. It truly is a tricky problem.

From a legal perspective, it is a common misconception that employers are
under a duty to pay sick pay. SSP is payable by an employer only after a period
of four or more consecutive days of sickness. Employers frequently top up SSP,
and will also cover the three ‘waiting days’ during which it is not payable,
but they are not legally obliged to do so.

Before implementing fundamental changes to a sick-pay system, employers will
no doubt try to identify the root causes of absenteeism. Absence levels and
patterns should be carefully monitored, and the consequences of abuse of the
sick pay system clearly communicated to employees. Employers should meet with
their staff to identify the underlying reason for any regular short-term
absence. If workers know they can ‘get away with it’, and there is a culture of
‘everyone does it’, then the problem will only get worse.

Employers that contemplate introducing tougher measures to reduce excessive
absenteeism should remember that any change to sick-pay arrangements will
constitute a change to the terms and conditions of employment, and employee
consent will be required. The only way to introduce such a change without
consent would be to terminate the existing contracts and offer new terms. If
faced with entrenched opposition from its workforce, most employers would
consider this a dangerous strategy and a step too far.

By Linda Farrell, Partner, Bristows

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