Will the New Health and Work Service Cure Sickness Absence? - as published on Lexis®PSL Employment

The government’s new Health and Work Service aims to tackle sickness absence and help employees who have been off work sick for four weeks to return to work. The service will offer a work-focused occupational health assessment and case management to employees in the early stages of sickness absence. The Department for Work and Pensions (DWP) estimates savings to employers of around £70m a year and a potential reduction in absence duration of between 20% and 40%.

What are the aims of the Health and Work Service?

The Health and Work Service aims to help employees on long term sick leave to return to the workplace as soon as possible. An occupational health professional will provide state-funded occupational health assessments reporting back to the employer, employee and GP on how best to enable a return to work.

It will also provide case management for the minority of employees with complex needs who require ongoing support to enable them to return to work.

The government expects employers will be able to rely on the report to provide definitive advice on whether the employee can return to work immediately, a likely timetable where more time is needed and adjustments helping facilitate an earlier return to work.

Why has a new service been introduced?

The service has been introduced following recommendations made by an independent review of sickness absence. The government commissioned an assessment of the sickness absence system to explore how the system could be changed to:

• help people stay in work; and
• reduce the associated costs for the taxpayer and businesses.

The state spends £13bn a year on health-related benefits while employers annually spend £9bn on sick pay and associated costs.

There is also the personal and financial cost to the employee taking time off work. Evidence suggests the longer someone is on sick leave, the less likely it is they will return to work. Lack of access to independent occupational health assistance was identified as one of the key barriers preventing people from returning to work. The new service aims to address this gap.

Could the government do more to prevent sickness absence?

The government has already published revised fit note guidance for GPs, employers and individuals. This emphasises that GPs assessing fitness to work should assess an individual’s health condition in relation to work in general and not just one specific role.

It is also providing a tax and national insurance exemption for amounts paid by employers to fund medical treatment to assist employees to return to work. Up to £500 spent by the employer or reimbursed to the employee in any tax year will be exempt from tax and Class 1A National Insurance Contributions. The exemption will apply both where the treatment is recommended by the Health and Work Service and where it is recommended by occupational health services arranged by the employer. The hope is that this will encourage employers to fund medical treatment to assist employees to return to work.

Has the service been welcomed by employers and employees?

Pilot schemes have been running in England, Scotland and Wales and the response has been positive:

• 80% of users reported that the specialist advice received was excellent or good;
• more than 90% of users found the advice useful and said they would recommend the service to others; and
• the evaluation suggests services were highly valued for providing fast access to professional advice.

Perhaps unsurprisingly, the reaction from larger employers who already have access to occupational health services has not been as positive:

• a study conducted by insurer PMI Health Group, which questioned 58 HR managers from medium to large firms, discovered that 86% of respondents were not confident the service would fulfil their occupational health requirements;
• one criticism of the service is that it will only provide advice to employers when staff have been absent for more than four weeks—this means it will not help them monitor the ongoing health of staff and develop preventative methods to reduce absence.

However, the Chartered Institute of Personnel and Development has welcomed the service as filling a gap for small firms without access to occupational health advice and whose employees will be helped to make a quicker and lasting return to work.

Who is providing the health assessment?

The new service will be provided by the private sector. The contract to provide the service is being put out to tender and is expected to happen during February 2014.

The service will use a range of healthcare professionals, including occupational health nurses, nurses with occupational health experience, occupational physicians, physiotherapists and mental health specialists. Further details will be known when the tender document is published.

How will the abolition of the Statutory Sick Pay (SSP) Percentage Threshold Scheme (PTS) affect businesses?

The Percentage Threshold Scheme (PTS) offers a rebate to employers experiencing a higher-than-average level of sickness absence. If the total SSP they pay is more than 13% of the total gross national insurance contribution liability in a month, payments over that level can be recovered from the state.

It is mainly smaller employers who have benefitted from the PTS and so they will be impacted the most by its abolition. The government hopes the removal of the rebate will encourage employers to tackle sickness absence, rather than rely on the state to fund it.

What does the service mean for employment lawyers?

The new service does not involve any changes in the law. However, if the service delivers what it promises (provides definitive advice on whether an employee can return to work and adjustments facilitating an earlier return to work), employment lawyers will be able to give more robust advice when advising employers dealing with long-term sickness absence.

In theory, there should be far fewer cases of employers needing to deal with long term sickness absence as the majority of employees will return before long term absence becomes an issue.

In practice we will have to wait and see how effective the new service is in order to understand the impact for employment lawyers and the advice they give.

This article was first published on Lexis®PSL Employment on 13 February 2014. Click here for a free 24h trial of Lexis®PSL