Regaining control of the workplace

Most
employers are reluctant to dismiss sick, stressed and incapable employees for
fear of the consequences. Karen Seward and Rachel CSmith discuss how it can be
done

Employers
need to regain control of their workplaces and manage incapacity proactively.
This involves taking the initiative, monitoring absence, identifying the
problems early and consulting with employees and their doctors. The objective
is to understand the reasons behind the absence, and what steps can be taken to
address it.

A
myriad of legal issues

The
legal issues surrounding incapacity are multi-layered and intertwined and it is
impossible to consider any in isolation.

The
starting point is the employment contract, as employers will be held to terms
made. Examine what occupational sick pay is payable. In the absence of any
other contractual provision on incapacity, you will be expected to continue a
person’s employment as far as receiving contractual occupational sick pay is
concerned, until the end of the period provided for, and not to take steps that
will interfere with that right.

Complications
may arise where a permanent health insurance scheme exists. This removes a huge
amount of flexibility. It will be a breach of the contract’s implied duty of
trust and confidence for an employer to dismiss an employee for incapacity
before they have had the opportunity to make a claim under that policy, or
while enjoying benefits under that policy. This is because, inevitably, it is a
term of the policy that the employee must remain employed.

Employers
can face negligence claims when dealing with incapacity, often in the form of
stress claims. Sick employees use the word ‘stress’ with increasing frequency,
and there is no denying the difficulties an employer faces when presented with
a succession of sickness certificates bearing the word ‘stress’.

An
employee bringing a personal injury claim must show that an employer has
breached the duty of care to the employee, that it was reasonably foreseeable
that an injury would result from the breach, and that a loss in the form of
personal injury had occurred. Employers must monitor stressed employees to
ensure they are not adding to the stress, and above all, act reasonably.

One
of the most problematic issues for those having to manage sickness absence is
the Disability Discrimination Act 1995. Uncapped compensation and no minimum
service requirement are an added attraction for those seeking to bring a DDA
claim.

Liability
for unfair dismissal will depend on the procedure an employer adopts and how
reasonably it acts in dismissing the employee. So, what strategy should an
employer adopt when faced with an employee’s incapacity?

The
law is one thing, but practice is another. Whether dealing with persistent
short-term or long-term absentees, the key is proactive management. Only by
taking control of the issues and managing the staff can an employer activate
the green light of dismissal.

Take
the following example: employee X is an HR assistant with four years’
service.  Since the rapid expansion of
the department during the past two years, X has been bullied by other members
of his team. His blood pressure is high, and he recently started having panic
attacks on the way to work. He has taken one or two days off every fortnight for
the past six months, and his performance is deteriorating. His manager started
the disciplinary process, which has resulted in him now being signed off work
with stress. What can his manager do?

First,
identify the issues. Short-term absence is often a symptom of a more serious
problem – in this scenario, possibly harassment. To gain a better understanding
of the problem, the employer needs to better inform itself on X’s condition. A
company doctor should examine him. The employer must then consider whether
there is a DDA issue. This is unlikely on these facts, but the employer needs
to ask the doctor to confirm whether the condition has a substantial adverse
effect on the employee’s ability to carry out normal day-to-day activities.  When doing so, it will need to bear in mind
that X will be able to request copies of any medical reports under the Access
to Medical Reports Act 1988 and the Data Protection Act 1998.

The
employer should then analyse the costs versus benefits of managing X back to
work, or possibly towards dismissal. This will involve consideration of what
his absence is costing in sick pay and temporary cover and what possible claims
X could bring if dismissed – unfair dismissal, discrimination, and/or personal
injury if the stress is caused by work and the ‘injury’ is reasonably
foreseeable, for example.

Finally,
he will need to be managed. In practical terms, this could involve transferring
the bullies or X out of the team. This would need to be done in consultation
with X to find out what, aside from stopping the bullying, the company can do
to reduce his stress at work. If managing X out is a possibility, the employer
will need to actively monitor X’s sickness absence and consider whether he
should be offered counselling for his panic attacks and therapy for his high
blood pressure. A return-to-work interview may be a way of raising X’s
performance issues, but also of warning him that if his persistent absences
continue, this may become a disciplinary matter.

If,
ultimately, the employer decides it wants to manage X out of the business, it
could dismiss for capability reasons. This would require a fair process and
consultation.  It could also consider
dismissing him for poor performance. This would again require a fair procedure
involving setting targets for X to meet and deadlines for assessing his
continuing development.

The
timeline opposite provides an estimate of how long this process might take.

The
strategy would be quite different if X had already been absent for almost 26
weeks, had exhausted his entitlement to company sick pay and was in the process
of being considered for PHI. In these circumstances, it would be more likely
that disability could be an issue. Consultation with the company doctor should
have been taking place  in this case
throughout the absence to gain an appreciation of how long-term the effects of
the stress were likely to be.

Serious
consideration would need to be given to what reasonable adjustments the
employer could make to get X back to work in some capacity. This could involve
part-time hours, a less stressful role and less responsibility, away from the
bullies. A prognosis from the doctor about the potential longevity of X’s
complaint would also be key.  If X is
rejected for PHI and not amenable to the adjustments the employer is proposing,
the employer could move towards dismissal. 
If X does return to work in some capacity, his performance will need to
be managed in the same way as if he had been a short-term absentee. The
timeline (below) sets out the timetable we would propose for actively managing
the long-term absentee.

Short-term
absence

The
difficulty with short-term absentees is that it can take a long time for an
employer to identify that a problem exists and the absence is persistent. This
is where some form of absence-tracking system is beneficial.

Once
the employer has recognised that there is a problem, taken steps to find out
the reasons for the absence and sought medical advice, there should be a
return-to-work interview with the employee. The purpose of this is to find out
what the employer can do to help reduce the employee’s absences and to
communicate the level of attendance expected by the employer and the standards
expected of the employee’s performance.

The
employee should then be monitored frequently for the first month or so to
assess the level of improvement. If none occurs, the employer should invoke the
disciplinary process. If there is some improvement, the employer needs to
continue monitoring. If the level of improvement varies or declines during the
next two months, the employer will need to invoke the disciplinary process.

Long-term
absence

The
key to managing a long-term absence employee is to start the process as soon as
the GP’s sick note indicates a long period of absence. If it indicates, say, a
month’s absence for stress or depression, warning bells should sound for the
employer to obtain its own assessment from occupational health during, for
example, weeks four and six of the absence. This will enable the employer to
get an early prognosis and prepare for an application for PHI by weeks nine to
12 of the employee’s absence.

If
the employee has a terminal illness, the employer should also consider at this
point the possibility of an incapacity pension. By the end of the normal term
for company sick pay, it will then know whether the insurers will cover, or
whether to manage the employee back in or out of the business.

The
timeline then starts to resemble the timeline for short-term absentees, week
0-1 being week 27 of the long-term absence timeline.

Karen
Seward is a partner and Rachel C Smith is a senior associate at Allen &
Overy

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