Employers must know how to manage employees on long-term sickness absence to ensure they fulfil their legal obligations and avoid potentially costly Employment Tribunal claims.

But what is 'long-term sickness absence'? 

We outline below some crucial issues concerning long-term sickness absence, which include holiday, dismissal, and discrimination.

When is sickness absence ‘long-term’?

There is no legal definition as to what length of absence will amount to long-term sickness absence.

However, sickness absence of more than four continuous weeks is generally defined as long-term.

Do employees accrue holiday entitlement while on long-term sickness absence?

Employees on long-term sickness absence continue to accrue their holiday entitlement as normal.

Carrying holiday into the next year

If an employee is unable to take some or all of their holiday entitlement due to sickness absence, they will be entitled to take it once they return to work, regardless of whether this is during the next holiday year.

Employees on long-term sickness absence must be allowed to take holiday at a later date, even if this means that holiday must be carried across to the next year.

If an employee does not return to work from sickness absence before the end of the holiday year, their holiday entitlement will automatically carry over to the next year.

They do not need to make a request to do so whilst they are absent.

However, employees prevented from taking holiday due to sickness absence are not able to carry over their holiday entitlement indefinitely.

It is generally expected that employees who carry over their holiday entitlement due to sickness absence take it within 18 months.

Holiday pay on termination 

Employees who are unable to take holiday due to sickness absence will be entitled to payment in lieu of their accrued holiday entitlement upon the termination of their employment.

Can you dismiss an employee who is on long-term sick?

It is possible to dismiss an employee on long-term sickness absence on the ground of ill-health capability, but employers should approach dismissal with caution.

Before resorting to dismissal, you should consider alternatives, particularly any contractual entitlements, as failure to do so may enable the employee to bring a claim of breach of contract.

You must be able to show that dismissal for ill-health capability was reasonable in the circumstances and that you followed a fair dismissal procedure, particularly if the employee has over two years’ service and therefore unfair dismissal rights.

Things to consider before dismissal 

Before considering dismissal, you should review the available medical evidence to assess whether it is likely that the employee will be able to return to work in the near future.

If medical evidence suggests that the employee may be able to return to work, you should consider any reasonable adjustments, such as varying the employee’s hours or working conditions, to avoid the need for dismissal. 

If medical evidence suggests that the employee will not be able to return to work any time soon, you should arrange a meeting to discuss the medical report and whether any reasonable adjustments could assist their return to work.

If following the meeting, it is clear that no reasonable adjustments will assist the employee’s return to work or such adjustments cannot be reasonably implemented, you can then initiate the dismissal procedure.

It is important to consider whether the employee has a protected characteristic under the Equality Act 2010, such as disability or pregnancy, as they may be able to bring a discrimination claim, as discussed below.

You should also review any company sick pay scheme that is in place, because if you seek to dismiss an employee who is still entitled to sick pay, this is likely to be considered unreasonable by the tribunal.

Dismissal procedure 

It is important that any contractual capability procedures or policies are followed and that a fair dismissal procedure is carried out.

This involves writing to the employee, holding a formal meeting and granting the opportunity to appeal.

1) Invitation letter

You should send the employee a letter outlining the length of their sickness absence, including any medical evidence, and explain how this has impacted the business and that it may result in their dismissal.

The letter should invite the employee to attend a meeting to discuss their sickness absence, and it should state that dismissal on the ground of ill-health capability is a possible outcome.

The employee should be made aware of their right to be accompanied by a work colleague or trade union representative and that they will have the chance to propose alternative arrangements.

2) Meeting with the employee

At the meeting, you should outline the nature of the employee’s sickness absence, referring to any medical evidence, and explain why dismissal may be necessary in the circumstances.

The employee should have the chance to respond to any comments or proposals made and be able to put forward their own suggestions or alternative arrangements which may enable their employment to continue.

If any new information arises during the meeting or further medical evidence is required, the meeting can be adjourned.

At the end of the meeting, you should summarise the situation and inform the employee as to when they are likely to receive a decision.

If the employee fails to attend the meeting, it can be postponed, and it may be appropriate to seek medical advice as to the employee’s ability to attend.

If reasonable attempts to rearrange the meeting have been made and it is unlikely that the employee will be fit enough to attend a meeting any time soon, you may proceed without a meeting.

In this situation, the employee and their representative should be given the opportunity to write to you, and any submissions they make must be considered before a decision is made.

3) Outcome letter and appeal

If you decide that dismissal is fair and reasonable in the circumstances, you should inform the employee in writing.

The employee should be dismissed on the ground of ill-health capability with notice or pay in lieu of notice.

They should also be paid in respect of any holiday entitlement they have accrued but have been unable to take due to their sickness absence.

The letter should set out the employee’s right to appeal, including the appeal deadline.

If the employee appeals, they should be invited to an appeal meeting with a different and ideally more senior manager.

The outcome of this meeting will be final.

Potential discrimination issues

It is essential to consider whether an employee on long-term sickness absence is disabled or pregnant, as they may be entitled to bring discrimination claims.

Disability 

There is no time limit for bringing disability discrimination claims, and there is no limit set on the amount of compensation that can be awarded; therefore, they pose a serious risk to employers.

Disability is a protected characteristic under the Equality Act 2010, and an employee is disabled if they ‘have a physical or mental impairment that has a substantial and long-term adverse effect on their ability to do normal day-to-day activities’.

It is not always clear whether an employee will fall under the definition of disabled, so if in doubt, you should obtain a medical report to make an accurate assessment.

There is a duty on employers to make reasonable adjustments for disabled employees so that they are not disadvantaged and failure to do so amounts to discrimination.

Therefore, you must implement reasonable adjustments, such as altering duties and providing support, especially any recommendations set out in the medical report, to assist a disabled employee in returning to work.

If you are seeking to dismiss a disabled employee on the ground of ill-health capability following long-term sickness absence, you must proceed very cautiously.

A disabled employee who is dismissed because of sickness absence related to their disability could bring a discrimination claim.

To defend such a claim, you must be able to demonstrate that the dismissal is justified as a proportionate means of achieving a legitimate aim, which can be a rather high threshold.

Pregnancy 

Pregnant employees have special protection regarding sickness absence that is pregnancy-related.

If a pregnant employee is on long-term sickness absence, you should establish whether the employee’s absence is pregnancy-related or not.

If the employee’s absence is not related to her pregnancy, then the protections do not apply, and her absence will be treated in the same way as any other employee.

If the employee’s absence is pregnancy-related, you must not take it into account for absence management purposes as disciplinary action resulting from a pregnancy-related absence will amount to pregnancy/maternity discrimination.

Employers are under a duty to conduct a risk assessment for pregnant employees, and you should refer back to this if a pregnant employee is on sickness absence to determine whether her illness is work-related and identify adjustments to assist the employee’s return to work.

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About the author 

James Rowland

James is the Commercial Director at Neathouse Partners and regularly writes articles surrounding issues in HR & Employment Law. Outside of the office, James is a keen Cricketer, playing in the Cheshire League for Nantwich CC. He also loves going to watch his football team, Crewe Alexandra. Feel free to connect with James on LinkedIn.

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