IBEC | the Irish Business and Employers Confederation A Guide to Managing Absence Employee AbsenteeismA Guide to Managing Absence

Report Author: Anne Coughlan Senior Research Executive IBEC Research andInformation Service September 2004 Employee Absenteeism This Absence Management Guide is for information purposes only and IBEC assumes no responsibility for any use to which the information may be put, or for any errors. The guide is not a substitute for specialist industrial relations and/or legal advice where appropriate. Member organisations are invited to consult IBEC in this regard. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, or by any information storage or retrieval systems, without the prior permission of the publishers.Introduction 4 1 Measuring Absence 6 How is absence measured? 6 What is included/excluded as absence? 6 Other measures of absence 6 Number of spells or frequency of absence 6 The Bradford Score 7

Calculating the Bradford Score 8 2 Recording Absence 9 Why record absence? 9 Advantages of monitoring and recording absence 9 How should absence be recorded? 10 Who should record absence? 11 Data Protection Acts 1988 and 2003 11 3 Cost of Absence 12 Calculating the cost of absence 12 TABLE 1: Costs included in the calculation of absence 12 Checklist for calculating the cost of absence 13 4 Causes of Absence 15 Why do employees not attend work? 15 Causes short-term absence 16 TABLE 2: Causes of short-term absence males 17 TABLE 3: Causes of short-term absence females 17 Causes long-term absence 18 TABLE 4: Causes of long-term absence males 18 Absence and stress 18 TABLE 5: Causes of long-term absence females 19 Absence and alcohol 19 Other causes of absence 19 2 Table of Contents IBEC Research and Information Service3 A Guide to Managing Absence 2004 5 Absence Management Strategies 20

An absence management policy 20 Absence management measures short-term absence 20 The role of the line manager 20 FIG.1: Measures used for managing short-term absence 21 Return to work interviews 21 An alternative approach 23 Absence triggers 24 Flexible working arrangements 25 Restricting sick pay 25 Counselling/advice services 25 Attendance bonus 26 Health education/wellness management programmes 26 Other measures monitoring when absences occur 27 Managing long-term absence 27 FIG.2: Working time lost short-term and long-term 28 Long-term absence strategy 28 Rehabilitation/reintegration 28 FIG.3: Measures used for managing long-term absence 29 6 Disciplinary Procedures 30 7 Case Studies 33 8 Absence and the Law 41 Employment Appeals Tribunal cases and absence (Unfair Dismissals Acts, 1997-2001) 41 Industrial Relations Acts, 1969 and 1990 43 Employment Equality Acts 1998 - 2004 43 9 An International Perspective on Absence 45 The United Kingdom 45

The European Union 45 The United States 46Absence control can often be an important step in the process of reducing business costs. Because of competitive pressures, companies can no longer afford to carry unnecessary absence that they may have tolerated in the past. Therefore, many companies are focusing on the issue of eliminating, or at least reducing, unnecessary levels of absence. Absence affects more than just the person who is absent. The absent employees themselves and their dependants may have a reduced income as a result of absence, besides incurring possible additional medical expenses. Employers are affected by direct costs such as sick pay, overtime and staff replacement costs, plus the indirect costs associated with the effects of absence on, for example, production and quality, management time and the potential loss of customers. The co-workers of an absent employee may have to work under increased pressure, in order to meet deadlines. From an economic point of view, there is the loss of potential output, plus the increased government spend on social security payments. For example, the cost to the State of disability benefit (i.e. a payment made to insured persons who are unfit for work due to illness) in 2002 was 385.4 1

million. Invalidity pension (payable instead of disability benefit if a person has been incapable of work for at least 12 months) cost the State 403.6 million in 2002. But absence control is not just about cost. When absence is not addressed or addressed in an inconsistent manner, lower morale can result. Employees can feel they have been treated unfairly when they perceive other absent employees as getting away with it. Absence can also be a symptom of a more serious underlying problem, such as bullying and/or harassment, communication breakdown, stress, etc., which could, if not investigated, lead to significant costs to the organisation, as well as causing long-term damage to the employee. Employees, themselves, also may have personal circumstances that require them to take time off work. A recent IBEC survey 2 showed that personal problems were cited as a cause of absence in a significant number of companies, for both males and females. A certain level of absence is to be expected, as employees may have to be absent from work as a result of illness. In the majority of cases, employees are acting responsibly by staying at home

to recover, instead of coming to work and either passing on their illness to other staff, or returning to work too early and getting a more severe illness. Employers, however, have the right to expect responsible absence behaviour when a healthy working environment is provided. Over half of the companies in the IBEC survey thought that it would be possible to reduce their absence rates. The notion of what constitutes absenteeism has changed through the years as employees statutory leave entitlements and authorised company-level leave have increased. In 1980 3 the Federated Union of Employers (FUE) defined absenteeism as all absence from work other than planned holidays. Nowadays, apart from sickness, employees can be absent from work for any 4 Introduction IBEC Research and Information Service 1 Statistical Information on Social Welfare Services 2002 Department of Social and Family Affairs - Government Publications 2 Workplace Absence Survey - 2004 Irish Business and Employers Confederation (IBEC)

3 Federated Union of Employers Absenteeism Control: A Practical Handbook for Management Action 1980one of a number of reasons, either under statutory leave entitlement (such as annual leave, maternity or adoptive leave, parental leave, force majeure and carers leave), or under arrangements agreed at an individual company level (such as compassionate or bereavement leave, study and/or exam leave, marriage leave, training, etc.). Historically, there has also been a shift away from viewing the term absenteeism solely as a pejorative term, to also identifying and addressing the underlying causes or conditions. In the past the term has been associated mainly with the notion of malingering or pretending to be sick (for example Moore 4 in 1977 defined absenteeism as the practice of workers failing to report for work on some slight excuse or none at all). Concern about absence can be triggered by high levels of absence, the necessity to find ways of reducing costs, in addition to needing to find an acceptable level of absence. Many organisations appear to accept a certain level of absence i.e. where a proportion of their employees are away on any particular day. The recent IBEC study found that over half of the respondents did not consider they had a problem with absence. However, more than four out of ten companies

in the survey considered their absence levels to be a cause for concern. As only a portion of absence days are subject to organisation control it is important to determine what portion of employee absence is avoidable. This report contains data from the IBEC Workplace Absence Survey 2004, which was based on responses received from 557 private sector companies employing 147,000 employees. This guide sets out to provide information and assistance in relation to absence management and is divided into a number of sections as follows: Measuring absence how it is calculated is there more than one method? Recording absence why and how should this be done? Cost of absence what should be included? Causes of absence what are the causes are there differences for different groups of employees? Absence management strategies what are companies doing about short and long-term absence? Disciplinary procedures what are the steps? Case studies how do different companies deal with absence? Absence and the law what do I need to know? An international perspective on absence how are other countries faring with absence?

IBEC member companies are requested to contact the IBEC Research and Information Service or their IR/HR executive for further information on any of the issues covered in this report. 5 A Guide to Managing Absence 2004 For every 1% drop in absence rates, the company makes a saving of 250,000 on sick pay and overtime alone. (Electronics company, in South-East region employing 500+ staff) 4 Moore, E. (1977) Industrial Relations and the Social Order, p504 in Blennerhassett, E and Gorman, P (1986) Absenteeism in the Public Service Information Systems and Control Strategies Dublin: IPA