Employee Sickness Review Recommends Creation of a New Decision Body

The Government has published the results of an independent review of the sickness absence system, which recommends the creation of an Independent Assessment Service (IAS) to provide an in-depth assessment of an employee’s physical and/or mental function when they have absent from work for around four weeks. The IAS would also provide advice about how an employee absent due to sickness could be supported to return to work. 

The review also analyses the current sickness absence system and makes a number of other suggestions to help reduce the 140 million days lost to sickness absence annually. 

The review states that the current sickness absence system is failing as it pushes people away from the labour market towards inactivity, fails to invest in support for those that need it and adds significant cost to businesses. To address these failings, in addition to the creation of the IAS, the review recommends that:

• Fit note guidance should be revised to ensure that judgments about fitness to work move away from only job-specific assessments. Currently, the majority of statements of fitness for work sign people off as completely unfit for work, so employers cannot make adjustments where an illness is compatible with a return to work.
• Employer expenditure to keep sick employees in work, or to speed their return to work, such as medical treatments or vocational rehabilitation, should attract tax relief and this should be targeted at basic rate taxpayers.
• The Percentage Threshold Scheme (PTS), which compensates mainly smaller employers for very high rates of sickness absence in their businesses, should be abolished.
• Statutory Sick Pay record-keeping obligations should be abolished, thereby helping to reduce employer administrative burdens.
• The Government’s ‘Employers’ Charter’ should be updated to address misconceptions and legal uncertainty around sickness absence management.
• Further research should be carried out into why a significant number of people claiming ill-health benefits who come straight from work, especially from smaller employers, appear not to have been paid sick pay by their employer beforehand.
• Existing tax relief on employee assistance programmes (EAPs), which provide information, advice and counselling on a variety of issues causing absence or performance problems, should be retained.
• The Government should review occupational sick pay in the public sector.

The review states that its recommendations could save £400 million a year for employers, up to £300 million a year for the State, and boost economic output by up to £1.4 billion. 

The Government will respond to the review in due course.

Words by Abbey Legal