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Businesses lose a lot of money through sickness absence, not all of it legitimate. While many issues can be handled informally, there are times when clear policies and decisive action are needed.
You need to understand your obligations to pay sick pay. But you will also want to manage absence and if necessary take disciplinary action.
1. Sickness absence payment
Employers have to pay sick pay to those employees who are entitled to it
- You must pay anyone who qualifies for SSP from the fourth 'qualifying day' of sickness.
- The first SSP payment should be on the next - or, at the latest, the second - pay day after the sick leave.
Many employers choose to opt out of SSP requirements
- Your SSP arrangements must be more generous than the legal minimum.
- You must keep detailed records.
2. Statutory sick pay (SSP)
SSP is the minimum level of payment you must make to any qualifying employee unable to work because of physical or mental illness or disablement.
SSP is paid at a flat rate of £89.35 per week
- SSP is payable for a maximum of 28 weeks for any one period of sickness, and is subject to income tax and employees' National Insurance contributions (NICs).
- Employers must issue Form SSP1 by the end of the 23rd week to let the employee know when SSP will be ending.
Employees become entitled to SSP from the fourth 'qualifying day' of sickness onwards
- A qualifying day is basically a day on which the employee would normally have worked.
- In practice, this means there are usually three days before SSP is payable in any 'period of incapacity for work' (PIW).
- If the employee is sick on a weekend, Bank Holiday or any other non-working day this counts towards the four-day PIW, but is not a 'qualifying day'.
Employers must keep full records of SSP
- Records must be kept for three years.
- Failure to do so can lead to a £1,000 fine.
3. Who qualifies for SSP?
SSP is for all employees who are unable to work because of sickness and who earn enough to qualify. This includes temporary staff and agency workers working on a fixed-term contract, regardless of the contract length.
You must pay SSP to any employee who is unfit for work
- There is no qualifying length of service or minimum number of hours a week.
The employee's earnings must be over the NI lower earnings limit of £113 per week
You can withhold SSP in some circumstances
You can do this if the employee:
- has recently drawn a state benefit (such as maternity allowance or Employment and Support Allowance);
- is held in custody.
4. Tracking sickness absences
You should have clear rules and show employees they are enforced.
Tell employees they (or someone else) must notify you by telephone that they are sick
- State that this should be by, say, 10am on the first day.
Ask employees who are off sick for less than seven days to fill in a self-certificating form
- The form gives the reason for their absence. Insist on a specific description so you can track whether there is a pattern.
- You can design your own form, or use self-certification form SC2 from HM Revenue & Customs (HMRC). Form SC2 does not say that giving false information is a disciplinary offence and has no place for a supervisor to sign, which you may want to include.
Interview employees who have been off sick on their return
- You may want to do this for all employees who have been off sick for a specified period of time (eg seven days). Return-to-work interviews are the first line of defence against abuse of the system.
- There may be things you can do to prevent a recurrence of the ailment. For example, providing better seating for an employee with back problems.
Ask for a doctor's 'fit note' for periods of sickness of more than seven days
- This indicates whether an individual is not fit for work or may be fit for work.
- A 'may be fit for work' statement is given if the doctor believes your worker's health condition may allow them to work, if you give them appropriate support.
5. A pattern of absence
Those who set out to exploit the system unfairly often fall into habits of abuse. These habits may show up as patterns in your personnel records.
Be on the alert for lots of short absences
- Repeated absences involving Mondays and Fridays may be particularly significant.
- People who work too many hours, for whatever reason, tend to be off sick more.
A pattern of absences coinciding with major sporting events may be suspicious
A combination of frequent lateness and one-day absences demands investigation
- The employee may have continuing difficulties at work, or at home.
- There may be chronic health problems that need to be addressed. Consider seeking information from the employee's GP or sending the employee for an Occupational Health assessment.
- Whichever it is, you need to know. Consider providing counselling, instead of embarking on the formal disciplinary procedure.
Backs, stress and headaches
Bad backs, stress and headaches cause more pain and suspicion in the workplace than any other sickness issues.
The key to controlling this kind of absence is to emphasise that repeated absence may put their job is at risk, whether the absence is genuine or not.
Encourage employees with persistent health problems to seek proper medical advice
- If they refuse, or no improvement is seen, tell them the level of absence is unacceptable.
- Make it clear the next step may be to start the disciplinary procedure, which may lead to dismissal.
- Consider seeking information from the employee's doctor or Occupational Health regarding the employee's absences before taking disciplinary action.
No business can afford to carry employees who keep missing work
- This is especially so if other employees believe the sickness is exaggerated. The costs must be judged in terms of cash and morale.
If you believe someone is exploiting the system, consider dismissing the offender
- Follow your disciplinary procedures.
6. Reducing sickness absences
Create a good working environment
- Invest in ergonomically sound furniture, lighting and equipment.
- Enforce health and safety standards.
- Encourage teamwork, contact between people and positive motivation.
Move sick or injured employees to other duties which will not affect their condition
- If a doctor has stated that your employee 'may be fit for work', they can offer suggestions about adjustments to help your employee return to work.
The Government has launched 'Fit for Work'
- Fit for Work provides help and advice for employers, employees and GPs to help reduce sickness absence.
- GPs can refer employees that have been, or are likely to be, off work for four weeks or more for an occupational health assessment which will provide a return to work plan.
7. Sickness and discipline
All your employees share an interest in seeing that the few who try to exploit the sickness provisions are brought into line.
Spell out, in your disciplinary procedure, the consequences of wilful absenteeism
- Any procedure must be seen to be fair, objective and consistently applied.
- If you discover that an absentee has not been genuinely ill, you will probably wish to activate your formal disciplinary procedure.
- This could eventually lead to sanctions (eg loss of benefits) or even to dismissal. If you dismiss, you may have to be able to satisfy an employment tribunal that the dismissal was fair.
You can withhold SSP if you reasonably suspect an employee is not ill
If you want to stop paying SSP to an employee after repeated absences, seek an adjudication
- Write to HMRC's Medical Services enclosing the employee's written permission for Medical Services to become involved and any medical certificates the employee has supplied.
- If the employee refuses to give permission, this may be grounds to stop SSP.
- Medical Services will get a report from the employee's GP, and may conduct its own examination, before deciding if SSP can be withheld.
- If Medical Services decide that an employee has grounds for their continuing absence, you should continue (or reinstate) SSP.
- If the advice is that the employee can work, you can choose not to pay SSP, but must explain why.
- If the employee is dissatisfied, they are entitled to a written explanation and can seek a formal decision from HMRC. Once HMRC has decided whether or not SSP should be paid, they will inform both you and the employee.
Always tell employees if levels of sickness absence are putting their jobs at risk
If the disciplinary procedure is invoked, make it clear why
- State that it is the repeated absence from work, and thus the employee's 'capability' to do the job, that is causing the problem.
- If the process ends in dismissal and a tribunal hearing, it is much easier to justify dismissal on grounds of lack of capability than to get involved in arguments about whether illnesses were real or not.
8. Long-term sickness
Do not abandon an employee who is on long-term sick leave
- Arrange progress reports and home visits.
- Make the employee aware of his or her position. Just knowing there is a job to come back to can help people's recovery.
After a long time away, an employee may feel fear about returning
- Suggest a staged return to work, on a part-time basis, building up to full time.
- Occupational Health, advice from the employee's doctor or the Fit for Work scheme will be helpful in planning a return to work.
Explore the possibility of alternative duties
- Could the employee come back and do lighter work?
If a return looks unlikely after a long illness, consider offering early retirement
- Consider the possibility of enhanced pension arrangements.
Be careful about whether a long-term problem is a disability
- It may not always be obvious what a disability is. A long-term health problem may amount to a disability under the Equality Act.
- If dismissals resulting from long-term sickness involve people with disabilities, they must be for 'a substantial and material reason'.
- You are under a positive duty to make reasonable adjustments to the job, or the way it is done, to stop a person with disabilities being at a substantial disadvantage.
If you can show you have considered all the alternatives and consulted the employee, you can dismiss a person for reasons of sickness.
You can dismiss a sick employee at any time when it is reasonable to do so
- In established companies, this may mean waiting for the full 28-week SSP period.
- In a small firm where a gap in the ranks could threaten the business, it might be reasonable to dismiss sooner.
You will need to have gathered all the facts to show that the dismissal is reasonable
- This should include full medical information.
Contact the employee's GP, with his or her permission, for a medical assessment
- The employee has the right to refuse permission, or to see the doctor's report and to request amendments to it. In case of doubt, ask the employee to agree to an independent examination.
- If you get no co-operation, explain that a decision will be taken on the basis of available information, which may result in dismissal.
Check whether there is any serious prospect of an eventual return to work
- If not, explain to the employee that the job can no longer be kept open.
Confirm the dismissal
- Give the appropriate written notice and the appropriate pay.
Rules of thumb
Employees will occasionally need time off for visits to the doctor or dentist or for hospital treatment. Be sympathetic but realistic.
Let employees know that you expect them to take a reasonably constructive attitude
- Make it clear that you expect employees, where possible, to arrange appointments for the beginning or end of the day to minimise lost time.
You may ask to see an appointment letter or card
- There is often no documentary evidence available for a one-off visit to the GP.
- If you have real doubts, seek permission to contact the doctor or dentist directly.
Encourage people recovering from injury or illness not to prolong their absence
- Offer to send a taxi, or arrange a lift, for someone getting over a broken leg.
- Suggest light duties or part-time work for an employee who is not fit enough to do what he or she normally does.
Recognise that NHS patients may have little choice about when to have surgery
- If the surgery is important but non-urgent, they may have no choice about when it happens.
- You may insist that paid holiday time be taken for purely cosmetic surgery.
- Ask an employee to complete a statement of sickness using form SC2 online.
- Find guidance on fit notes from the Department for Work and Pensions.
- Find guidance or refer an employee to Fit for Work.
- Find guidance on assessing fitness to work for SSP and contacting Medical Services from HMRC.
- Find guidance on managing absence from Acas.
Employment law is complex and is changing rapidly. This factsheet reflects our understanding of the basic legal position as known at the last update. Obtain legal advice on your own specific circumstances and check whether any relevant rules have changed.
"If you suspect that certain employees are taking sick leave without justification, but do nothing about it, it sends a damaging message to the rest of the workforce." - Amanda Galashan, EmployEase