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Taking trouble to avoid ill-advised moves on sick pay

Published on Friday, 13 Dec 2013
Fiona Loughrey
Sarah Berkeley

Most employers will be familiar with dealing with employees absent on sick leave on occasion; this is an inevitable part of managing a workforce. Whether the sickness in question is a short bout of seasonal influenza or a more serious long-term illness, employers need to be aware of the potential legal and other problems which may present. It can be advisable and helpful to have strategies in place for dealing with the relevant issues.

The Issues
Questions that an employer may occasionally need to ask, when an employee claims to be unwell, are whether the sickness claimed is genuine and if the period of absence is justified. An employer will usually wish to require the employee to produce a medical certificate. This will go some way towards verifying that the employee is in fact ill or incapacitated. This is also, in Hong Kong, a statutory requirement before an employee is entitled to receive statutory sickness allowance.

An employee who is genuinely unwell should be able to provide a certificate fairly easily, but what if the employee is unable, or refuses, to provide one? In this event, the employer’s obligation to pay statutory sickness allowance – calculated as 80 per cent of average daily salary – falls away. The employer may also consider investigating. If it transpires that the alleged incapacity is not genuine, this may be a disciplinary issue.

Steps to Take
If an employer has established that an employee’s illness is genuine, what other initial steps should be taken?

An employer should ensure compliance with any statutory requirement to pay sickness allowance or any applicable sick pay entitlement. It is also important to keep an open line of communication. An employee who feels supported and in touch is more responsive to steps to manage the absence than one who feels ignored. An effective sick leave policy assists proactive management of absence, ensuring employer and employee understand what is expected.

Matters often become difficult when sick leave becomes long-term. This can cause real disruption to small or medium-sized businesses, and may result in an employer contemplating separation on the basis that the business cannot continue to carry the cost.

Employers must be aware that termination cannot be contemplated – except in the case of summary dismissal for gross misconduct and the like – while an employee is on paid statutory sick leave. Breach of this is an offence and the employer may be prosecuted. Entitlement to sick leave accumulates from the start of employment and can be taken after one completed month of service. It accrues at a rate of two days for each completed month of service during the first 12 months of service, and four days for each completed month thereafter, up to a maximum of 120 days.

Considering dismissal
Once an employee has used up statutory sick pay entitlement, an employer can consider dismissal, but care should be taken to ensure the employee does not have grounds to claim disability discrimination contrary to the Disability Discrimination Ordinance. “Disability” in this context is interpreted very broadly and, in practice, covers most illnesses and injury.

Before a decision to dismiss, an employer should think about whether there is an accommodation it can make which would enable the individual to return to work and would not impose an unjustifiable hardship on the employer.

This may include modifications to premises, changes to job design, an alternative role, amendments to schedules or practices, specialist equipment or training. Advice from a medical expert may be necessary.

Where accommodation is inappropriate or has been exhausted, dismissal may be an option. Care should be taken before proceeding to this stage.

Fiona Loughrey has headed Simmons & Simmons’ award-winning China employment group since 1999.

Sarah Berkeley has extensive experience in advising on employment and discrimination issues, and has worked at the firm since 2001.

The information contained in this article should not be relied on as legal advice and should not be regarded as a substitute for detailed advice in individual cases. If advice concerning individual problems or other expert assistance is required, the service of a competent professional adviser should be sought.

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