Employment Seminar
The Employment Department held an Employment Law Seminar in May which provided a summary of Employment Law relating to employee sicknes.
Below is a brief synopsis of the seminar material. If you would like further information, please contact Bethan Southcombe on 0117 945 3084 or e-mail employment@metcalfes.co.uk
SICKNESS ABSENCE AND LONG TERM SICK
SECTION ONE
INTRODUCTION
Employees take an average of 8.4 days sick leave a year
Public sector employees take an average of 10.3 days
Minor illnesses are the main cause of short-term absences
Almost 50% of employees admit to "throwing a sickie" at least once a year
Manual workers - back pain, musculo-skeletal injuries, stress and recurring medical conditions
Non-manual workers - stress, back pain and recurring medical conditions.
Payment during sickness absence
No statutory right to receive full pay unless contractual entitlement/sick policy
Employees are entitled to receive statutory sickness pay (SSP)
S1 Employment Rights Act 1996
Statutory sick pay
- Absent for four or more consecutive days (including weekends)
- 28 weeks within a three-year period
- Current rate is £75.40 per week
- Increases in April of each year
After 28 weeks, any sickness benefit entitlement will be paid directly to the employee from the Department for Social Security (DSS)
Employer should be notified of all payments received
Eligibility criteria for SSP
SSP notification requirements
Evidence of incapacity
Contractual sick pay
Discretion to extend payment: DDA and pregnancy-related illness
- Nottinghamshire County Council v Meikle [2004]
- O'Hanlon v Commissioners of HM Revenue & Customs [2006]
- Relevant factors for an employer to consider when determining whether to continue sick pay
- North Western Health Board v McKenna
No express contractual right to sickness pay
Dismissal whilst in receipt of contractual sick pay
Withholding sick pay
SECTION TWO
UNFAIR DISMISSAL
Employees with over one year's continuous service have the right not to be unfairly dismissed
One of five potentially fair reasons - caution required
The (potentially fair) reasons for dismissal that are likely to be relevant to sickness absence dismissals are:
- Capability
- Some other substantial reason ("SOSR")
- Conduct
Statutory dismissal procedures (see section four)
SECTION THREE
DISABILITY DISCRIMINATION
There is no minimum qualifying period under the Disability Discrimination Act 1995 ("DDA")
When will a sick employee count as disabled?
- An employee will qualify as disabled for the purposes of the DDA if they have a physical or mental impairment which has a substantial and long-term effect on their ability to carry out normal day-to-day activities (section 1, DDA).
Discrimination
- If an employee satisfies the definition above, the employer must be careful not to discriminate against them either on the grounds of their disability (direct discrimination) or for a reason related to their disability (disability-related discrimination) and also not to victimise them
Duty to make reasonable adjustments
Establishing less favourable treatment, identifying comparators & justification
Damages for claims under the DDA are unlimited and can take account of injury to feelings and a likely prolonged period out of the workplace
Median figure for successful DDA claims in 2003/4 was £5,652
Cause of employee's illness
Counselling services - Intel Corporation (UK) Ltd v Daw
Sickness absence in practice: implementing capability procedures and DDPs
1. Investigate the cause and likely length of absence
2. Keep in contact with employee
3. Obtain medical evidence
4. Consult with employee regarding medical evidence
5. Consider reasonable adjustments or alternative employment
6. Contemplate dismissal and initiate statutory DDP
SECTION FOUR
THE DISMISSAL AND DISCIPLINARY PROCEDURE ("DDP")
DDP: Step 1 Letter
Provide employee with a letter outlining "the alleged conduct or characteristics, or other circumstances, which lead the employer to contemplate dismissing the employee".
The letter is also required to "inform the employee of the basis for the employer contemplating dismissal on the ground of poor attendance" and sufficient information to ensure that they have a "reasonable opportunity to consider their response to that information".
The letter should also set out:
- the date
- location and timing of the meeting
- purpose of the meeting
- outcome of the meeting may be dismissal
Disabled employee - required to make reasonable adjustments
Employee genuinely unwell?
Right to be accompanied at the Step 2 meeting.
DDP: Step 2 Meeting
The meeting must take place after the Step 1 letter has been sent and before any action is taken in respect of the employee
Employee should have the opportunity to put their case and outline any mitigating circumstances
Common problem with implementing sickness procedures and the DDP
Failure to attend due to employee's sickness
Following the Step 2 meeting a second letter should be sent to the employee confirming the employer's decision "without unreasonable delay" and confirming the employee's right of appeal.
DDP: Step 3 Appeal Meeting
Time scale to appeal
ACAS recommends five days
Right to be accompanied to the appeal meeting
Notify employee of final decision following the meeting
Dealt with by a more senior manager than the person who conducted the first meeting
DDP: Disciplinary action short of dismissal
The 3-step DDP triggered when considering any disciplinary action short of dismissal, other than formal warnings.
Relevant disciplinary actions might include requiring an employee to report in to a manager every day, withholding contractual sickness pay for uncertified absence, or demotion.
SECTION FIVE
OTHER CONTRACTUAL AND COMMON LAW ISSUES
Permanent health insurance (PHI)
PHI is a type of insurance policy which can be taken out either by an individual or an employer to provide benefits in the event that the employee is unable to work by reason of illness or injury
Providers of PHI impose strict criteria
Frustration of contract
Frustration occurs where a contract of employment is terminated by operation of law (and therefore without the intention of either party) and without any dismissal taking place under ERA
Frustration most commonly takes place in circumstances not envisaged by either party and therefore not provided for in the contract of employment. Frustration is usually deemed to occur independently of the fault of either employee or employer.
Ill-health retirement
Early retirement by reason of ill-health may be an option for employees who are unable to continue working.
Pension scheme rules
Statutory DDP?
Holidays and sickness absence
This is subject to change
On 22nd April 2005 the Court of Appeal, heard the case of Commissioners of Inland Revenue v Ainsworth and others [2005].
It was held that a worker on long term sick leave cannot designate part of that leave as paid annual leave under regulation 13 of the WTR and that, if the worker has been on long term sick leave and unable to work at all in a particular leave year they will not have any entitlement to holiday pay in that year. A worker who has been dismissed, having been on sick leave since the start of the annual leave year, will have no entitlement to leave under regulation 13 and therefore cannot claim payment in lieu of untaken holiday under regulation 14 of the WTR.
The Court's reasoning is not clearly set out however, and one grey area in particular remains in relation to a worker who is on sick leave for part only of the leave year. The Court appeared to contemplate the possibility that the worker's entitlement to leave in that year might be less than four weeks. They did not however indicate how any reduction should be calculated, and there is no provision in the WTR for a pro rata reduction of the employee's entitlement. Ainsworth was referred to the ECJ by the House of Lords under the name of HM Revenue and Customs v Stringer & others together with the German case of Schultz-Hoff v Deutsche Rentenversicherung Bund which raises similar issues.
The Advocate General has delivered her opinions in both cases. In Stringer she said that a worker can accrue paid annual leave while off sick but cannot take that paid annual leave during their sick leave. She added that on termination of employment workers are entitled to compensation for annual leave which has accrued but has not been taken due to illness. Her opinion in Schultz-Hoff went a little further to say that workers who have been unable to take leave due to illness in any leave year are entitled to take that leave when they return to work even if they return in a subsequent leave year. If they do not return to work, they are entitled to a payment in lieu of any leave they were not entitled to take in previous leave years.
In the meantime, and in view of the Advocate General's opinions in Stringer and Schultz-Hoff, employers should exercise caution as Ainsworth does not establish a general rule that statutory WTR annual leave ceases to accrue if a worker is absent. For example, three months on sick leave during the year would not automatically reduce a worker's annual leave entitlement by a quarter. Employers could however specify in an employment contract that contractual leave over and above the statutory WTR minimum does not accrue during sick leave.
SECTION SIX
CHECKLIST FOR SICKNESS ABSENCE DISMISSALS
1. Refer to any applicable sickness or absence procedures and relevant provisions in employee's contract of employment and keep confidential records of medical certificates, correspondence and telephone calls
2. Investigate nature, extent and likely duration of illness, by obtaining relevant medical evidence if necessary (with employee's written consent unless using company doctor). If absence is stress-related refer employee to any stress policy or counselling services on offer
3. If absences are short-term and intermittent, investigate whether there is any underlying cause (medical or otherwise), and, if necessary, follow capability or disciplinary procedure, offering practical guidance and assistance and setting timescales for improvement, giving warnings where appropriate
4. Consider whether employee is disabled for the purposes of the DDA, using medical evidence as required
5. Consult employee throughout procedure but especially in relation to medical evidence received, prior to making adjustments, identifying an alternative position or taking decision to dismiss
6. Consider whether any adjustments to employee's duties or workplace would facilitate their return to work (or their taking less time off if absence is intermittent)
7. Consider whether these adjustments are reasonable in the circumstances
8. Consider importance of employee and/or the post occupied, to the business, the impact their continued absence is having on the business and the difficulty and cost of continuing to deal with their absence before contemplating dismissal
9. Consider whether employee could take up alternative employment or whether there are any other possible options in the particular circumstances, which fall short of dismissal
10. Send letter under step 1 of the statutory standard dismissal and disciplinary procedure (SDDP) as soon as dismissal or any relevant disciplinary action is contemplated
11. Before taking decision to dismiss, consider surrounding circumstances, age and length of service of employee together with action taken in respect of similar circumstances in the past. If employee has been absent long-term and is unlikely to return in the foreseeable future consider claiming under terms of any PHI or ill health retirement policy. Seek additional medical evidence if such a claim requires it
12. Review medical evidence to ensure it is up-to-date. Identify correct reason for dismissal: capability, conduct or SOSR?
13. Hold meeting with employee under step 2 of the SDDP and confirm any subsequent decision to employee in writing
14. On dismissal ensure employee's contractual and statutory entitlements are met and that they receive correct pay entitlement, including holiday pay under the WTR. In the dismissal letter identify reason for dismissal, effective date of dismissal and offer employee the right of appeal from the dismissal decision in accordance with step 3 of the SDDP
15. Hold appeal meeting under step 3 of the SDDP if requested by employee and confirm decision to employee in writing
SECTION SEVEN
KEEPING A PAPER TRAIL
Accurate and legible records
Used as evidence at tribunal
Managers should retain file notes of telephone conversations with absent employees, as well as records of telephone messages left
Follow up messages and telephone conversations with letters
Records should be stored confidentially and in accordance with any record-keeping policy and only used for the purposes for which they are collected.
SECTION EIGHT
POSSIBLE REASONABLE ADJUSTMENTS
Adjustments may be appropriate
Reasonable in the context of the specific circumstances
Examples included:
- Staggered return to work
- Varied start and finish times
- Relocating an employee's workstation so as to remove any obstacles to efficient working
- Continuing sickness pay beyond any contractual or discretionary policy Reallocating an employee's duties
- Purchasing equipment or software which assists an employee to carry out their duties
Agreement with affected employee
SECTION NINE
ISSUES ARISING FROM MANAGING SICKNESS ABSENCE
- Monitoring Absence Data
- Decision-making using sickness data
- Training personnel to deal with sickness absence
- Sickness policies and procedures
- Return to work interviews
- Procedures for absence other than illness
- Creative solutions
SECTION TEN
MEDICAL REPORTS
An employer may wish to obtain a medical report in respect of an employee in any of the following circumstances:
- As a pre-employment check where health or physical ability is a relevant factor for the job or as a prerequisite for membership of an employer's health insurance scheme
- To gather information to assist with determining whether the employee is suffering from a physical or mental impairment which might constitute a disability for the purposes of the (DDA) and/or to determine whether any reasonable adjustments, which might assist them to carry out their job, are required under the DDA
- To obtain a prognosis concerning the likely timescale within which an employee will return to work following a period of long-term absence
- To consider whether an employee who has taken a substantial amount of short-term intermittent absences is suffering from any underlying medical condition
- To consider whether an employee might qualify to receive benefits under a permanent health insurance policy
Contact
Judith Ellery Head of Employment
Bethan Southcombe Solicitor