Before you start to manage anything, you should first ask the question of whether staff sickness absence is really a cause for concern in your business?

The average cost of staff sickness absence to most employers is around £700 per employee per year, although The Federation of Small Businesses found in a recent survey that the potential cost to small employers is between £1,500 and £5,000 per year. Whilst these costs are less than medium and larger sized companies, they remain extensive for a small employer.

Sickness absence does not occur in every small business all the time and in fact many may not experience any sickness absence at all in any one year. However, all businesses want to grow and expand, but to do this it will need to gradually increase staffing, which in turn increases the potential costs of sickness absence per employee. In 2011 it was reported that sickness absence cost around £17bn to the UK economy with 30.4 million working days lost to sickness absence.

Therefore the chances are that just because sickness absence is not a large scale problem within your business now, there is every chance that it could be at any given opportunity. We aim to provide you with 10 useful tips to support you in managing sickness absence and avoid it becoming a significant concern before it actually does.

1.      Legal Issues

There are an array of legal issues that all employers should be aware of before seeking to tackle any sickness concerns.

The Equality Act 2010 came into force and brought a number of discrimination Acts under one legislative umbrella and outlined 8 protected characteristics. Employers should remain mindful of all protected characteristics in general, but in this case there is one significant characteristic that we may come into contact with more often than others, disability. Whereas disability discrimination only related to the individual themselves, The Equality Act 2010 made adaptations to the law so that individuals could also be discriminated by association. Meaning that those who have caring responsibilities or are related to dependants with disabilities are also covered as a protected characteristic. Therefore individuals with this characteristic may be expected to have higher than normal levels of sickness absence depending on conditions and retain the right not to be treated less favourably than others.

Equally employers have to ensure they are providing a safe and secure environment for their staff to work within and under the Health and Safety at Work etc Act 1974 there is also the onus to protect those returning to work who may be vulnerable or at higher risk because of illness.

However, on the other side of the coin, and in many ways dependant on your staffing contracts, employees are required to provide constant regular attendance to fully meet their contractual obligations. Whilst it is also important that employers adapt fair procedures before taking formal actions against staff.

2.      Short-term and Long-term Sickness

Many may consider that both intermittent and longer-term sickness is one of the same thing as they are both periods of sickness absence. However it is important that both Short-term and Long-term sickness are seen as two differing areas of absence and is therefore managed in different ways.

We would categorise Short-term sickness absence as intermittent absence that is sporadic throughout a given 12 month period. With staff that fall within this category you will be aiming to reduce the number of intermittent occasions of sickness and obtain the desirable level of attendance.

Therefore, we would categorise Long-term sickness absence as a more significant event for a staff member as they have either been absent from work due a significant condition or have been confirmed as not fit for work by their GP. In these cases the main objective of the employer is to ensure the safe return of the staff member to the workplace as quickly as possible, whilst ensuring all reasonable and supportive adjustments and adaptations to the workplace are made.

Therefore it is important to adopt differing approaches to managing differing forms of sickness absence and increasing staff attendance.

3.      Set Triggers

As we have already outlined, as an employer you have a legal obligation to adopt fair policies and procedures which inform staff how they can anticipate their sickness absence to be managed. Putting triggers in place for what you would consider to be unacceptable levels of absence, will support you in defining whether you are managing Short-term or Long-term sickness absence.

For example you may consider that an individual with 4 occasions or 10 days absence is a cause for concern for Short-term sickness absence and an individual who has reached 3 weeks continuous absence is a concern in relation to Long-term sickness absence.

Triggers should be fair and realistic, but also set a basic framework for managing absence and supporting attendance. The triggers that are set are also designed to define what your business considers to be unacceptable levels of absence and where further support may be required.

4.      Be Supportive

This area is usually considerably understated when managing sickness absence as the main focus is on reducing business costs and increasing attendance, but sickness absence, whether it is Short-term or Long-term, even genuine or un-genuine would not occur without an underlying concern. As a ‘reasonable’ employer you should seek to understand the causes of an individual’s sickness absence and how the business can potentially support the staff member.

If a staff member had been suffering from migraines and had a series of absences related to this, we should seek to question whether there is an underlying condition that may be causing this or is there anything in the working environment that could be attributing to the condition?

The main objective of managing an employee’s sickness levels is to achieve better attendance, if we forget to understand and also support, then the sickness absence levels will continue to increase and the employee could react negatively to the poor apathy.

5.      Maintain Good Records

This tip should be a standard practise for most employers, but it can’t be emphasised enough how important maintaining good records are to effectively managing absence.

When it comes to managing sickness absence, you should have records of all absences and when they occurred, previous discussions such as return to work interviews or formal meetings regarding absence and perhaps even previous ‘Fit Notes’.

These records will be essential in managing absence and further supporting staff, by recognising patterns or a potential history of conditions.

6.      Maintain Contact with Absent Employees

It’s not uncommon for employers to be apprehensive to remain in contact with absent employees; however a sensitive approach would generally assist in the management of absence and further support the staff member. Retaining good contact with those on long-term sickness, especially, is particularly important to retain a feel of ‘normal life’ and prevents individuals feeling isolated and disengagement with work.

Employers should always use caution if, for example, there is any medical evidence to indicate that contact should be avoided due employee stress. There is no onus on the employee to retain regular contact with their employer, other than to provide Fit Notes or as required under in accordance with their contract or the company’s policies and procedures.

7.      Company Policies and Procedures add to Consistency

When managing any form of employee absence, the consistency and a clear frame work for its management is critical. As an employer you have a number of differing legal obligations you are required to meet and your company policy and procedures provide the structure to your terms and conditions of employment.

In this sense, your company policy on managing absence provides your managers with the support and structure to manage unacceptable level of absence, whilst also ensuing that they are supportive to individual circumstances. However, whilst it is critically important to have policies and procedures in place, without utilising them effectively, training managers on how to use them effectively or raising staff awareness to them, the policies and procedures will serve no purpose at all.

8.      Obtain Medical Reports

Obtaining medical reports could prove to be a significantly useful resource in managing both short-term and long-term sickness absence. In cases of short-term sickness absence in particular, medical reports would help the employer to better understand the nature of any underlying medical conditions. A medical report is not provided to make a management decision, but should focus on the reasons for the level of absence and advice management of any conditions.

For cases of long-term sickness absence a more detailed report will be required along with regular reports remain up-to-date on the employees conditions. Employers should be seeking information on the nature and prognosis of any illness, whether the condition had been work related, when the employee may be able to return to work, whether the condition is considered a disability and if any reasonable adjustments will be required.

Medical reports can be requested from the employees GP or consultant, Occupational Health Department (if you have one) or a company doctor. If the employees GP or consultant prepares a report, the employer will be required to obtain the employees consent in accordance with the Access to Medical Reports Act 1988 and the employee will have the right to review the report before it is forwarded to the employer.

Medical reports provided by the employees GP could for these reasons not be as objective as an independent Occupational Health Department or a company doctor. For these reason we highly recommend either appointing an external Occupational Health Department or company doctor.

9.      Measuring Sickness Absence Levels

By measuring the amount of absence an employee has had over a rolling 12 month period, you can have a clear guide as to its exact impacts in the workplace, by understanding the amount of working days lost, patterns and potentially if there are areas with higher levels of absence than others.

Measuring absence should enhance your records of the employee’s absence by showing how much of their contractual working time has been lost through their sickness. One way of doing this is by simply obtaining a percentage of the amount of working time the individual has been sick for. You can do this by simply calculating the amount of working days or weeks that were available, deducting the annual leave entitlement and dividing the amount of sick periods by this number and multiplying by 100. For example, an individual that could have worked a total 232 days in 12 months after deducting the statutory annual leave entitlement, with 20 days sickness absence would have a sickness percentage of 8.6%. This means that 8.6% of the potential working time has been lost through sickness, which could then have significant impacts on productivity, staff morale, costs and ultimately the businesses profits.

Another method of measuring sickness absence is a technique called the Bradford factor. The calculation for this takes into account the number of occurrences multiplied by the amount of days. So for example a person with 12 occurrences of absence and 13 days would be as follows: 12 x 12 x 13= a Bradford score of 1872. An individual with 2 occurrences of 5 days and 6 days would be as follows: 2 x 2 x 11= a Bradford score of 44. In essence the higher the Bradford Factor score the more of a concern the absence becomes.

10.  Don’t Forget Attendance

When discussing the effective management of sickness absence and its impacts on a business, it’s all too easy to forget about the promotion of attendance and those that do not have any sickness absence at all within a 12 month period. This is a perfect example of the physiological contract with your employees in action. In other words, individuals are not solely motivated by money, and an employment contract that confirms payment of wages in return for work is not always sufficient to guarantee regular attendance and a higher level of productivity. Purchasing the services of an employee is not the same as purchasing machinery or a personal computer, the human assets in a business require the employer to go the extra mile in order for the employee to meet them there.

In this case, employers need to present an understanding that employee absences will occur and the business will be supportive, but attendance is most definitely a better option for the staff member. You can link high levels of attendance to an additional day’s annual leave, bonus payments or even rewarding gifts. Therefore there are other rewarding factors for regular attendance, and those that give high attendance levels will feel rewarded and not neglected. After all, there is a strong likelihood that this group of staff are the most productive and committed element of you workforce.

Through 2011 employers have had to endure wide ranging changes in employment legislation including increases in National Minimum Wage, increased Paternity rights, the introduction of the Equality Act 2010, the abolishment of the default retirement age and the introduction of the Agency Workers Regulations 2010. So, what are the predictions for employment law changes for 2012 and their likely impacts on small to medium sized businesses?

As in 2011, wide sweeping changes to current employment legislation will commence in 2012 that will offer both positive benefits and potentially challenging transitions for many employers. In our New Year update we will explore in brief the key changes in 2012 for employers:

Employee qualifying periods for Unfair Dismissal

Without doubt the changes to the qualifying periods for unfair dismissal claims will be the biggest change for employment legislation in 2012. From the 6 April 2012 the qualifying period for an employee to bring a claim for unfair dismissal is 2 years rather than 1 year. The increase in the qualifying period is intended to provide more time between the employer and the employee to resolve difficulties, provide employers with greater confidence in employing people and ease the increasing burden on Employment Tribunals.

So what does this change mean for employers? The changes in the qualifying period for unfair dismissal is a well welcomed change by employers as employees will have had to have worked for the employer for a period of 2 years before being eligible to bring a claim of unfair dismissal to an Employment Tribunal. Whilst we predict this change will reduce employer risks, increase employers recruitment confidence and potentially decrease Employment Tribunal cases, it will not reduce risks altogether. Immediately, the Government have clarified that the new qualifying period will not apply to those employed before the 6 April 2012 and therefore all of the existing workforce will still fall under the old qualifying period of 1 year.

If a claim is brought to an Employment Tribunal there could still be an increase or decrease of up to 25% in the event of an unreasonable failure to comply with the ‘ACAS code of practice on disciplinary and grievance procedures’. Equally there remains no qualifying period for individuals to bring a claim of discrimination relating to a protected characteristic such as Sex, Age, Disability, Race, Sexual Orientation, Religion or Belief, Pregnancy and Maternity, Marriage and Civil Partnership and/or Gender Reassignment.

Employment Tribunal Review

A consultation has been conducted by the Government into the Employment Tribunal Rules of Procedure and the potential application of fees for those bringing a claim.

This could see claimants of unfair dismissal cases having their cases heard by an Employment Judge alone and a requirement for a deposit order to be made for the continuation of the Tribunal Proceedings.

The first proposal is that any deposit by the Claimant will depend on the claim they are presenting to an Employment Tribunal. Therefore a less server claim for wrongful dismissal would attract a lower deposit in comparison to an unfair dismissal or discrimination claim.

The likely deposit range for claims is to be between £150 and £250 to initially file the claim, with a further £250 – £1,250 fee from the Claimant to continue the tribunal proceedings.

The second proposal is for a single deposit for raising a claim which could range between £200 and £1,750.

With the costs of Tribunals increasing to beyond £80m for the taxpayer, it is not surprising that a review is to be conducted to bring Employment Tribunals in lines with other court systems within theUK. It is felt that as well as the taxpayer, employers will also welcome such moves in hope that it will eliminate frivolous claims, with an emphasis on those that are settled outside of Tribunals to negate costs of proceedings. It is viewed that such changes would be a welcomed rebalance of the legal processes that will further support employment.

However, it is also argued that this could also result in serious cases of misconduct on the behalf of employers never making it to Employment Tribunals due to the deposits required from the Claimant. Yet it could also be inferred that only the most genuine and serious misconducts of employers will reach Employment Tribunals, reducing the cost burden on taxpayers and employers.

We recommend this is an area for employers to watch as further information breaks throughout 2012.

Pension Auto-enrolment

Auto-enrolment will undoubtedly be one of the biggest challenges for employers to come as staff members aged 22 to state pension age with earnings above the income tax allowance of £7,475 are eligible for a workplace pension arrangement. Employers will be required to automatically enrol eligible workers into a qualifying scheme, pay contributions and inform all eligible workers that they have been automatically enrolled and that they have a right to opt out if they so wished.

Whilst these changes will commence on the 1 October 2012 and will place a potentially significant burden on small to medium sized employers, the implementation of the new pension rules will be staggered on the basis of the amount of staff employed.

These are the only released staging dates at this time and therefore large employers will be target over the first year of pension auto-enrolment and therefore we advise small to medium sized employers to commence planning for these changes and monitor any further up-dates.

Further information can be found at http://www.thepensionsregulator.gov.uk/pensions-reform.aspx.

Statutory Redundancy Payments and Unfair Dismissal Awards Increase

It is predicted that 2012 will be another difficult year for businesses and employers and in many cases an unfortunate consequence of this may result in compulsory redundancies. On the 1 February 2012 the maximum amount of a weeks pay that can be used to calculate a statutory redundancy amount and the basic award for unfair dismissal will increase to £430. The maximum compulsory award for unfair dismissal will also increase to £72, 300. Furthermore the maximum amount for a guarantee payment, (payable to employees when the employer is unable to provide work and therefore is considered a workless day), will increase to £23.50 per day.

Increases in Statutory Maternity, Adoption and Sick Pay

It has been confirmed that the statutory rates for maternity, paternity and adoption pay will increase to £135.45 per week with effect from the 1 April 2012. Statutory sick pay will also increase from the 6 April 2012 to £85.85 per week.

This will increase the average amount employers currently loose through employee sickness absence which had previously been £670 per employee per year. This should provide further emphasis of the requirements on employers to manage employee sickness absences robustly and reduce cost implications.

In the blue corner, weighing in with Government and large public backing…the non-smokers and smoking ban enthusiasts; and in the red, slightly foggy corner…the smokers and other supporters. Clearly there are two sides to every story with the non-smoking corner not wanting to fall victim of passive smoking and fewer work breaks and the smokers wanting the freedom of their own decisions on their own personal health. So where precisely does the employer fall and is it dangerous to favour any one side?

Before answering this question lets first think about what the employer’s organisation and operations are? Let’s focus on businesses such as restaurants and healthcare clinics as an example. It’s clear where employees smoking habits could become a concern within this style of organisations, with one attempting to entice customers based on a menu of cuisine and the assumption of good hygiene standards and the other on the active promotion of health and wellbeing. In today’s modern society you would not need to look far to find individuals of the persuasion that smoking does neither promote good hygiene or health and wellbeing. In fact in both scenarios it could very much be argued that a connection with a known health risk and a widely considered antisocial activity, would not be considered positive in either case. So what about businesses in fields such as call centres and areas of work such as office administration which are not always face-to-face customer based roles, does the same ethos apply here?

What is the impact to the employer in these cases, could it impact on the business and its interaction with customers? In short the answer is yes and no. Yes employees that smoke at work can impact on the business through excessive smoking breaks and potential sickness absence. And no, smoking employees do not have face-to-face contact with customers, so there is less of an awareness of this from the customers and a supportive working environment with a degree of flexibility would promote more productivity. However, are forgetting the promotion of equality in these cases, in terms of the non-smoking employees. Is it motivational to them if they have potentially less workplace breaks because they choose not to have an antisocial habit?

A study conducted by Croner Consulting in 2003, estimated that a smoking employee would on average take three five-minute breaks a day for cigarettes, which works out on average to be 8 working days a year lost due to employees smoking. When you place this into perspective, a company would lose more working time through a smoking employee than the average sick employee.

Since the introduction of the smoking ban in Scotland and the rest of the UK in 2006 and 2007 it is thought that the numbers of ‘pavement puffers’ has increased significantly as workplace smoking rooms were abolished. In Breckland Council inNorfolkthey estimated that they were losing an astonishing one hour per day to smokers following the ban. They decided that they should take appropriate action and request smoking employees to clock out when having a cigarette break so that is in their own time.

Smaller employers however, feel powerless as smoking can erupt into a divisive debate and raise serious workplace tensions that clearly are not constructive to increasing motivation and employee engagement within companies. Owners of smaller companies often feel frustrated by feeling virtually powerless as they fall in the middle of the argument of individual rights in the workplace.

However it can equally be argued that employees in general should be taking regular breaks every 15 to 20 minutes. Furthermore the majority of statistics that are raised are based on guestimates which do not focus on employees using the internet or taking personal phone calls during working time. In this case are smokers actually doing anything wrong?

In truth the debate about smoking arises in many workplaces and many employers have many different perspectives on these arguments, but whatever your belief or view point it is hard to argue that the fact it’s raising tensions in the workplaces at all is negative on businesses.

In accordance with the Working Time Regulations 1998, employees working 6 or more hours in one shift are entitled to one 20 minute unpaid break from work, which can normally be taken away from the work station. In this sense employers are not obliged to provide smokers with additional breaks, but are legally required to prevent them smoking in the workplace.

Whatever your business, whatever its sector, in many cases smokers and non-smokers are more of a red herring, the issue is the instability of serious tensions between colleagues at work. Its up to individual employers to make a decision, but the lack of one could be more costly than the wrong one.

The economic climate has forced organisations to rethink the totality of expenditure and costs including that of the workforce to meet the changing demands during this time.

Equally the latest figures for 2009/10 show a 56% increase on the previous year’s Tribunal claims, which are the highest level on record and presents potentially additional costs for businesses.

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