Limiting legal liabilities becomes ever harder, but group income protection can be a safeguard against long-term absenteeism
No one wants to have an employee off work long term as a result of stress. But, if it does happen, it’s essential that employers abide by their legal obligations or the situation could become even more costly for their organisation.
One of the first considerations is the employee’s pay. Obligations here are dependent upon what is specified in the contract of employment and the rules surrounding statutory sick pay.
The majority of employers offer either four or eight weeks’ sick pay, according to research carried out on behalf of Unum. Professor Mike O’Donnell, chief medical officer at Unum, explains: “Some employers are more generous and offer six months’ pay or more but we also found that there was absolutely no correlation between the level of sick pay and absence levels.”
As well as the contractual rights, employees are entitled to statutory sick pay for up to 28 weeks, providing they earn more than the lower earnings limit for national insurance (an average of £90 a week). For the 2008/09 tax year, statutory sick pay is £75.40 a week.
Employment law must also be considered. Employers have responsibility to safeguard an employee’s mental health under the Health and Safety at Work Act 1974. They may also have obligations around the mental health of employees under the Disability Discrimination Act (DDA). Andrew Knorpel, partner at ASB Law, says: “Illnesses no longer need to be clinically well recognised for an employee to be covered by the DDA.”
Where an employee is covered by the DDA, the employer must make reasonable adjustments to the workplace and the employee’s duties if this will keep them in work. This could cover a wide variety of changes as Knorpel explains: “In these situations you might want to consider adapting the employee’s role to make it less stressful, allowing them to go part-time or phasing their return to work. Flexible or home-working may also be possible or indeed, a sabbatical. The adjustments must be reasonable but the larger the organisation the more it will be expected to do.”
Where it is not possible to make adjustments or someone simply does not want to return to the workplace, dismissal is possible. Eugene Farrell, business manager at Axa Icas, says: “If you’ve reached this stage then you should be seeking advice.” He recommends that employers should take legal and occupational health advice to ensure that they act fairly and within the law. “An independent occupational health service will ensure you have done everything you possibly can,” he adds.
Doing this is prudent on a number of levels. Failing to meet the requirements of the DDA can result in a six-figure award being made to any claimant, as well as damage to the employer’s reputation
Long-term absence and insurance
Group income protection is a valuable tool when dealing with long-term absence. In addition to providing replacement income when someone is off work for longer than the deferred period (typically six months), insurers are keen to provide support and advice to help minimise claims.
Linda Baker, product and market development director at Legal & General, says: “We like to know as soon as an employee could potentially be an income protection claim, even if the deferred period is six months or more. This means we can carry out a full assessment to make sure all the necessary steps are being taken from a legal perspective. Additionally, we can help with rehabilitation and retraining if this might help the person back into work.”
Group income protection insurers can also provide a useful mediation function, sitting between the employer and employee. “If someone’s coming back to work after a long period of absence it can be hard as so many things change. In these situations we’ll work with the employee, their colleagues and the employer to make sure this return is as smooth as possible,” adds Baker.
This could include a return to work for the employee in a part-time capacity or to a role that is less stressful, in both cases any income being made up with benefit so there is not a financial disadvantage to the employee.
• For more information about group income protection, visit the Group Risk Development site at www.grouprisk.org.uk.