Long-term sickness absence policy: a 16-step guide for HR

A watertight long-term sickness absence policy can give employees who are off work for an extended period the best chance of returning to work, and reduce the risk of employers facing disability discrimination or unfair dismissal claims. How should employers formulate their long-term sickness absence policy?

1. Set out the long-term sickness absence policy's purpose and scope

The introduction to the long-term sickness absence policy can clarify the need for the employer to balance:

  • giving an employee the time to recover from illness or injury, which may be a slow process; and
  • minimising the damage to efficiency and productivity that can be caused by an employee being off work indefinitely.

The policy can make clear that the organisation will consider dismissing an employee on long-term sick leave only after it has made all reasonable attempts to support their return to work.

The introduction to the policy can also set out what counts as "long-term sickness absence" and when the employer's separate short-term sickness absence policy applies.

Employers commonly define long-term sickness absence as lasting 28 or more calendar days, according to XpertHR research.

2. Set out expectations for managers and employees

It is a good idea to set out early on in the policy line managers' and employees' responsibilities in relation to long-term sickness absence.

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Line managers and employees should be told that it is the responsibility of both to keep in touch during long-term sickness absence.

Line managers should be reminded of:

  • the importance of seeking medical advice where appropriate; and
  • the potential for discrimination, particularly where the employee's ill health is related to disability or pregnancy.

3. Require employees on long-term sick leave to provide medical evidence

For sickness lasting longer than seven calendar days, medical evidence is required, normally in the form of a doctor's fit note, also known as a "statement of fitness for work".

It is particularly important that an employee on long-term sickness absence obtain a new fit note if they will not be returning to work after the end date on his or her original fit note.

4. Stress the importance of keeping in touch with the employee

Keeping in touch with employees absent on long-term sick leave is absolutely essential.

While there is no "one-size-fits-all" approach to keeping in touch, the policy can set out some trigger points for contact and the minimum expectations.

It is a good idea for the employee's line manager to contact the employee after 28 days' sickness absence to agree the method and frequency of contact.

Contact should be on a regular basis and at least monthly.

5. Explain employees' sick pay entitlement

Employees on long-term sick leave must be told about their sick pay entitlement.

How much sick pay do employers offer?

According to XpertHR research from 2016, around one in five respondents pay employees on long-term sick leave the minimum level of SSP only.

However, this leaves almost four in five that offer occupational sick pay that is more generous.

Some employers will choose to limit pay to statutory sick pay (SSP), which is paid at a flat rate, for a maximum of 28 weeks in any one period of incapacity for work.

However, some employers will offer a more generous contractual sick pay scheme.

The number of weeks' contractual sick pay that these employers offer is important.

The point at which enhanced sick pay runs out acts as an incentive to employees on long-term sickness absence to return to work.

6. Spell out the relationship between sickness and holiday

Long-term sickness absence raises the problem area for employers of an employee accruing large amounts of untaken annual leave.

The long-term sickness absence policy should explain that employees continue to accrue annual leave during sick leave, and that annual leave can be carried over in these circumstances.

7. Have a procedure in place for obtaining medical advice

Your organisation's obligations under the Access to Medical Reports Act 1988 and the Data Protection Act 1998 should be flagged up to line managers, the HR department and occupational health.

It is vital that an employer obtains an employee's consent when seeking a medical report from the employee's own doctor or the employer's occupational health department.

The long-term sickness absence policy should make clear that an employee's medical information should be kept confidential and stored securely.

8. Set a point at which employees are referred to occupational health

The policy should set a point at which employees are referred to occupational health, if they have not already been referred.

A good trigger point is when the employee has been absent for 28 calendar days, or as soon as it is confirmed that they will be absent for at least 28 days (for example, a fit note has signed them off for that period).

Employers without their own occupational health department could refer the employee to the Fit for Work service at this point.

The employee's consent is required before the organisation seeks a medical report on the employee's health, or contacts the Fit for Work service.

9. Sickness absence management: trigger points and appeal

The long-term sickness absence policy should have a system of trigger points for formal review meetings to take place.

For example, the stage 1 trigger point will occur after an employee has been absent for 28 days. At that point, a stage 1 long-term sickness absence meeting could take place.

Stage 2 long-term sickness absence meetings could then take place at three-month intervals.

If the employee is still off after 12 months, a stage 3 long-term sickness absence final formal review meeting could take place.

If an employee on long-term sick leave is given a warning or dismissed at any point, it is important that they can appeal against this decision.

10. Use phased returns to help employees back to work

Where an employee has been on long-term sickness absence, a phased return will often be the most successful way of returning him or her to work.

A phased return to work allows an employee to transition from ill-health absence back to full (or sometimes permanently amended) work duties.

A phased return to work could involve a gradual increase in hours, or an initial period during which the employee works from home on certain days.

The long-term sickness absence policy can explain:

  • when phased returns to work might be used (typically, when they are recommended by a doctor in a fit note or in a return-to-work plan provided by the Fit for Work service); and
  • the process that will be followed (often involving a meeting between the employee, his or her line manager and occupational health/HR to agree the exact arrangement).

11. Temporary reassignment can help employees back to work

Some work can be better than no work, and it may be an option for the employer to move someone who has been on long-term sick leave temporarily to a different role.

The policy could therefore have a built-in option to allow the employee's line manager to consider whether or not a different role is available within the same department.

Alternatively, the search for a temporary role could be widened to other departments.

The employee's existing rate of pay should be protected during the temporary reassignment.

It is a good idea for employers to place a limit on the length of a "temporary" placement.

12. Permanent redeployment may be an option

Where it appears unlikely from medical advice that an employee will be able to return to his or her existing role, the employer could consider redeployment.

An permanent new role should be an option only where the employer is confident that the employee will be able to perform well in the redeployed role.

Should the employee accept permanent redeployment, they should be asked to agree to a variation of contract.

13. Return-to-work interviews: essential after long-term absence

When an employee is returning to work following long-term sickness absence, their line manager should arrange to meet informally with them.

Ideally, the return-to-work interview will take place prior to the employee's return to work, to allow time for any necessary adjustments to be made to the employee's working arrangements and conditions.

If this is not possible, the interview should take place on the employee's first day back at work.

It is vital that what is discussed and agreed during a return-to-work interview is followed up. For example, it could be followed up with a catch-up meeting at the end of the employee's first week back at work.

The return-to-work interview should take place in a private room, and all discussions between the employee and the manager should be private and confidential.

14. Pregnancy and disability: why these are special cases

To avoid the risk of a discrimination claim, it is important for your organisation's long-term sickness absence procedure to treat absences related to disability and pregnancy-related illness differently.

When managing a disabled employee's absence, employers should be on high alert to the risk of a claim for discrimination arising from disability under the Equality Act 2010.

To dismiss a disabled employee or give them a warning for poor attendance may amount to discrimination arising from disability.

The safest course is to exclude absence that is pregnancy related when tallying an employee's sickness absence record for the purposes of managing absence.

15. Is ill-health retirement an option?

Under the employer's long-term sick policy, retirement on the ground of ill health could be considered where:

  • it appears unlikely from the medical advice that the employee will be able to return to his or her role; and
  • he or she is entitled to a pension or lump sum under his or her pension scheme.

If ill-health retirement is raised as an option, the employee's line manager should advise them in the first instance to contact the HR department or administrator of the employee's pension scheme.

16. What if the employee has a terminal illness?

There are special considerations where an employee is suffering from a terminal illness.

The policy can explain that the employer will endeavour to accommodate the employee's wishes and to provide the most financially advantageous arrangements for them.

This includes discussion of the possibility of ill-health retirement or the termination of employment with a lump-sum payment under his or her pension scheme.

The policy should remind terminally ill employees and their line managers that, while there is no obligation to inform the employer or any of their colleagues about the illness, it is normally better to do so to allow support to be provided.