Health and work service

8 September, 2014
by: Cripps Pemberton Greenish

 September 2014


Unfortunately, no employer is immune to employee sickness absence. The Office for National Statistics sickness absence report shows that sickness absence increases with age.  With the abolition of the default retirement age, many employers will be faced with an aging workforce and (according to these statistics) potentially an increased rate of employee sickness absence.  With nearly a million employees a year reaching periods of 4 weeks’ sickness absence, an overhaul of the existing sickness absence system was arguably long overdue.


Abolition of the Statutory Sick Pay Percentage Threshold Scheme:

A review of sickness absence by the Government was accordingly implemented, with a finding that the SSP Percentage Threshold Scheme (PTS) was outdated, and did nothing to actively promote or support the management of sickness absence and a return to work. 


The review recommended the abolition of the PTS, which took effect in April 2014.  This is intended to help fund the new Health and Work Service (HWS). The HWS is expected to launch on a phased basis beginning with the North of England, Midlands and Wales by late 2014, then nationally by May 2015.  This has left many small and medium enterprises in particular without the financial help of the PTS, and no alternative financial aid or otherwise in this respect, for an interim period. 

The Health and Work Service:

The aim of the HWS is to provide free, independent work focussed occupational health advice to all employers, and to help employees with a health condition to stay in work / return to work.  It is thought it will especially benefit small and medium enterprises who currently have limited or no in-house occupational health services.


Under the HWS, employees will generally be referred by their GPs to the service when they reach or are expected to reach 4 weeks’ sickness absence.  The service will provide:


  • an occupational health assessment;
  •  a case manager to support each employee through the assessment process;
  • more general health and work advice for GPs, employers and employees via telephone and a website;
  • a return to work plan which will be shared with the employer and GP; and
  • a tax exemption of up to £500 a year for each employee on payments for medical treatment recommended by the Health and Work Service, or an employer arranged occupational health service. 


What does this mean for employers?

Although the government is of the view that this scheme will make savings for employers as a result of reduced sickness absence, a number of potential outstanding issues and considerations for employers remain:

  • The scheme may add little benefit for those pro-active employers who already make use of or have an in-house occupational health specialist.  Employers will also need to weigh up whether to wait for a referral by an employee’s GP, or whether to make the referral themselves.  There will only be limited circumstances in which the employer can make the referral to the HWS if the employee’s GP has not done so by the end of the 4 week period.  We are awaiting further guidance as to the limited circumstances in which an employer referral can be made, and what issues will need to be taken into consideration.  
  • The referral to the HWS will predominantly be made by GPs where an employee’s absence reaches or is expected to reach 4 weeks.  The system does not appear to cater for situations where an employee has frequent bouts of short term intermittent sickness absence which do not exceed 4 consecutive weeks.  In these scenarios, it may still be necessary for an employer to make its own referral to an occupational health specialist. 


  • Employees will have the right to refuse a referral to the HWS.  It is unclear under the HWS system what (if any) ramifications there will be for employees who do not give their consent to a referral, though there are unlikely to be any.


  • Similarly, although there is a tax relief of up to £500 each year per employee, there is nothing to force employers to do anything with the advice provided by the occupational health experts, or to pay out for suggested medical treatment.  Where an employer refuses to pay for suggested medical treatment, this could hinder / slow down the return to work and potentially worsen employee / employer relationships.


  • The new HWS is likely to give rise to more referrals to occupational health specialists, which in turn is likely to give rise to an increase in suggested medical treatments, to facilitate a return to work.  No doubt this will result in an increased pressure on employers to foot the cost of such treatment, making use of the £500 tax exemption.  Employers will need to be careful when considering whether to pay for such treatments or not, particularly where an employee is disabled and the employer has a duty to make ‘reasonable adjustments’.  This may give rise to increased litigation to ascertain precisely what amounts to a ‘reasonable adjustment’ in this regard. 


  • Phased returns to work are notoriously difficult for some employers to accommodate, but are frequently suggested by occupational health specialists.  For employers who have not historically made referrals to occupational health, this may be an unwelcomed proposition.