News & Events

New measures to help employers manage sickness absence

By: Amanda Steadman

Submitted by Firm:
Addleshaw Goddard
Firm Contacts:
Michael Leftley, Sarah Harrop
Article Type:
Legal Update

The Government has published its Response to the recommendations outlined in the independent review of sickness absence led by Dame Carol Black and David Frost CBE in 2011.  The Response outlines a number of proposals designed to help employers, employees and the State reduce sickness absence.  The most significant proposal is the introduction of a new State-funded occupational health assessment and advisory service.


In 2011, the Government asked Dame Carol Black (then National Director for Health and Work) and David Frost CBE (then Director General for the British Chambers of Commerce) to undertake an independent review of the sickness absence system in Great Britain.  The Review analysed the impact of sickness absence on employers, the State and individuals, as well as the factors which contribute to and prolong sickness absence.  The Review set out a wide variety of recommendations on how to improve sickness absence rates.

The Response paper sets out the Government’s reaction to those recommendations and we report below on the proposals that will have an impact on employers.


State-funded health and work assessment and advisory service

The Review identified a lack of access to independent occupational health advice as one of the key barriers preventing many people from returning to work.  Accordingly, the Government proposes to create a new health and work assessment and advisory service to make occupational health advice more readily available to employers and employees, with a view to better managing sickness absence. 

To enhance its understanding of how this service should work, the Government has been operating a pilot scheme for small and medium-sized businesses in England, Scotland and Wales.  The Response reports that the services were highly valued for: “providing fast access to professional advice”, with over 90% of users finding the advice helpful.  In addition, employers involved in the pilot scheme reported a number of other positive impacts such as: being reassured that the service could affirm that a proposed course of action was appropriate, reducing staff absences and assisting employees to return to work.

The new service will provide:

  • A State-funded assessment by occupational health professionals for employees who are off work sick for 4 weeks or more. 
  • ‘Signposts’ to appropriate interventions (e.g. Universal Jobmatch - a new online jobsearch service for those employees who are unlikely to return to their original role but who are able to work). 
  • Case management for those employees with complex needs who require ongoing support to enable their return to work. 

It is estimated that the service will cost between £25 million and £50 million per year to operate but will reduce employers’ sick pay costs by between £80 million to £165 million and will increase economic output by between £450 million to £900 million.  It is also estimated that the new service will reduce sickness absence duration for its customers by between 20% to 40%.  The new service is to be delivered by external providers and will be available by the end of 2014.

Other measures to help employers improve sickness absence management

The Response also reveals a number of other steps that will be taken to assist employers manage sickness absence and help their employees to return to work.  These include:

  • Retention of tax relief on Employee Assistance Programmes. 
  • Abolition of the Percentage Threshold Scheme (PTS) which compensates employers for higher-than-average sickness absence (on the basis that the PTS acts as a disincentive to employers to actively manage workplace sickness). 
  • Possible new tax relief on the interventions recommended by the new service (to be decided at the 2013 Budget). 
  • Removal of the requirement on employers to maintain statutory sick pay records. 
  • Using the Employer’s Charter to provide better guidance on what employers can do to manage sickness absence.

Measures to support healthcare professionals

The Response acknowledges that GPs and healthcare professionals play a key role in helping employees back to work by encouraging patients to return to work where appropriate and by providing useful advice to employers about how they can support employees who are unwell. 

The Response sets out the following proposals:

  • Revised fit note guidance for GPs about using the fit note to clarify a patient’s general fitness to work, rather than focusing on a specific job role. 
  • Improve education on the relationship between health and work. 
  • Improve understanding of the relationship between mental health, employment and the welfare system. 


Although many larger employers already invest in occupational health provision, the new service will, nevertheless, provide a useful initial source of information and guidance on managing sickness absence.  The new service has been welcomed by the CIPD.  Ben Willmott, Head of Public Policy commented that: “Evidence…suggests that occupational health services are the most effective means of helping people with health problems back to work…the new service will…fill a gap in the market by providing free, independent, objective assessment and advice to help people make quicker and lasting returns to work”. 

Crucially, the onus is for tackling sickness absence is not placed solely at the employers’ door.  Where an employee is referred to the service, they will only be issued with further fit notes certifying their sickness absence if they “engage with the service”.   Although the Response does not spell out what “engagement” means in this context, it seems that, at the very least, this would involve entering into discussions with the occupational health professionals from the service (whether by telephone or face-to-face) and giving reasonable consideration to any recommended actions provided to them.

Together with a better understanding by healthcare professionals of the relationship between ill-health and work, it seems likely that these measures will have a positive impact on levels of sickness absence.

Fitness for work: the Government response to ‘Health at work – an independent review of sickness absence’