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Sickness absence system to be reviewed

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The Government has announced that the current employee sickness absence system is to be subject to a comprehensive review.

As part of speech launching the new Welfare Reform Bill, the Prime Minister, David Cameron said that the remit of the review will be to examine how the system can be reformed so that more people can be helped to stay in work and costs for employers can be reduced.

Due to report later this year, the review will also examine whether the balance of the costs of sick leave is appropriately shared between individuals, employers and the state.

It has been briefed, too, on making sure that any recommendations are consistent with promoting private-sector growth and minimising the burdens on business, especially SMEs.

The review will be fed into the wider Employment Law Review, which is looking at measures to reduce red tape and remove the burdens on business.

Employment Relations Minister, Edward Davey said: “This is an important review which will help tackle the problems faced by business and individuals. Managing sickness absence more effectively will be a win-win situation for all – businesses, individuals, the taxpayer and crucially, the economy. It could improve productivity, boost growth and mean that many more people no longer have to rely on taxpayer handouts.”


The manufacturing employers’ group, the EEF, welcomed the move.

Despite introduction of the fit note, barriers still remain to getting people back to work, the EEF argued.

A recent EEF survey revealed that time is lost waiting for tests, operations and therapies, and, while large firms can resource occupational health provision and expert support, it is far more difficult for SMEs to do the same.

In particular, EEF wants the review to ensure that private treatment to speed up rehabilitation is not treated as a taxable benefit as it is now; that NHS reforms do not compromise faster access to medical services; and that GPs get continued encouragement to take account of work related needs when issuing fit notes.

The EEF’s chief medical adviser, Professor Sayeed Khan said: “This is a welcome sign that government is taking the issue of sickness absence seriously. We now need to build on this by moving rapidly to delivering change that reduces the cost to business and supports much-needed growth.

“The replacement of the sick note with a ‘fit note’ has been positive by starting a culture change of improving communication between GPs and employers. We now need to maintain this momentum by helping medical professionals take into account the part work plays in good health as well as providing smaller employers with ready-access to appropriate treatments such as physiotherapy.”

David Frost, the director general of the British Chambers of Commerce and joint chair of the review, added: “Sickness absence undoubtedly has a huge impact on businesses – particularly on smaller firms that struggle with the processes and procedures required, not to mention the direct costs involved.

“The private sector must focus on growth if we are to sustain the recovery, so it is right that the Government has chosen to look at ways to reduce sickness absence in the workplace and get people back into employment.”