Attendance Management

by Kate Russell

Absence

According to the Confederation of British Industry (CBI), the estimated cost of sickness absence for UK businesses in 2009 was approximately £17 billion, although the total number of days lost through absence across the UK economy fell slightly in 2009 to an average of 6.4 days per employee.

At the organisational level, the costs of absence can be substantial. High absence levels tend to mean high overheads. Some indication of cost to the organisation is obtained simply by adding up the days of lost production and assessing the extra burden on the organisation’s sick pay scheme.

Other costs include the following:

  • Unnecessarily high staffing levels and overtime payments
  • Replacement labour
  • Delayed production
  • Management time
  • Lower quality or levels of service
  • Disruption of the flow of work
  • Low morale and general dissatisfaction, resulting in low productivity.

Background

The Confederation of British Industry and the Chartered Institute of Personnel and Development (CIPD) conduct an annual survey, asking organisations to estimate sickness absence rates and the associated costs.

The latest annual CBI/AXA Absence Survey was published in May 2010. Some 241 organisations took part in the survey, which collected data from 2009, and the key findings are listed below.

  • The cost of staff absence to the UK economy rose to over £17bn.
  • Organisations employing over 5,000 staff averaged 6.7 days’ absence per employee.
  • Organisations employing fewer than 50 employees averaged 5 days.
  • Absence levels were 2.5 days higher across public sector organisations than in the private sector. Employees in the public sector took an average of 8.3 days in this survey period.
  • The cost of absence, which includes covering salaries of absent staff, paying overtime and providing temporary cover, rose to £595 per employee in 2009.
  • The survey consistently finds that organisations which recognise trade unions have higher rates of absence (6.7 days compared with non-unionised environments 5.3 days). This is particularly true for the public sector and is irrespective of size.
  • Manual employees tend to take more days’ sick leave than non-manual employees (7.2 days compared with 5.3 days), but this gap has steadily narrowed. Absence levels for non-manual employees have remained broadly static for a decade.
  • The policies that had the most impact were waiting a period of days before paying sick pay, offering bonuses for good attendance and providing early access to medical care through private medical insurance.

Note that the results should be treated with some caution as there is some evidence that data collection and analysis in sickness may be flawed. A case study investigation of 13 organisations found that in only two could managers place any financial cost on absence (How Employers Manage Absence by Stephen Bevan et al, DTI Employment Relations Research Series, 2004). In 2001, a study of seven organisations estimated that absence costs between two per cent and 16 per cent of annual salary costs, with only half of this being due to the direct costs of paying absent employees. The conclusion drawn was that ‘even the most leading-edge UK employers... appear fundamentally ill-equipped to form a view of their sickness absence costs’ (Costing sickness absence in the UK, IES Report, 2001).

There is some evidence that patterns of absence and of underlying health are changing. The Health and Safety Executive has noted a growth in self-reported work-related illness, a particular rise in reports of stress and a rapid growth in sickness absence among those with a work-related illness.

Reasons for absence

There are several types of absence:

  • Short-term sickness absence (uncertificated, self-certificated or covered by a doctor’s certificate)
  • Long-term sickness absence
  • Unauthorised absence or persistent lateness
  • Other authorised absences: for example, statutory rights to leave (annual leave, maternity, paternity, adoption, or parental leave, time off for public or trade union duties, or to care for dependents) or contractual rights (compassionate leave).

Unauthorised absence should be dealt with through the disciplinary process as it is a misconduct matter. There are, however, many legitimate reasons why an employee might be absent.

Example

The Employment Rights Act provides that employees must be given time off by their employers to attend public duties. This not only includes sitting as a magistrate but also certain duties involved with, for example, being a member of a local authority, policy authority, board of prison visitors or prison visiting committee.

In terms of the amount of time allowed, there is no prescribed level but it must be ‘reasonable in the circumstances’. In R-W’s case her appointment as a magistrate required her to sit for 13 days per year. However, her employer, A Ltd would only allow her five days’ unpaid leave to attend to her public duties and told her to use her annual leave to cover the remaining eight days. R-W resigned and brought a claim of constructive dismissal and breach of her statutory right to take reasonable time off to attend public duties.

Initially, the employment tribunal held that A Ltd had not prevented the applicant taking time off to carry out her public duties and that her resignation did not amount to a constructive dismissal in the circumstances. However, R-W successfully appealed against this decision and the Employment Appeal Tribunal said that the tribunal had failed to have proper regard to the provision of the Employment Rights Act covering time off for public duties. They said that the tribunal should not have considered whether time off was given, but rather whether the applicant was given ‘a reasonable amount of time off’, which should be assessed objectively with reference to the requirements of the particular public office held and the needs of the employer’s business. One thing that was highlighted by this case was that not only are some employers unaware of their obligations in this area, but that all employers should have a clear policy in place and ensure that this is communicated to all staff and exercised consistently. When deciding what time off to allow an employee, the employer should look at matters objectively and consider both the demands of the business as well as the employee’s position.