Right to return for absentees.  Recommendation by think tank.

Right to return within one year of absence?

The Resolution Foundation published a report titled Retention Deficit in June 2016 to discuss the challenge of increasing employment level among disabled people. This article provides a summary of the report and recommendations. All the recommendations put forward here are those of the report authors.

Despite the employment rate sitting at a record high, the government has positioned halving the disability employment gap as a central challenge for the UK labour market. Progress in employment rates among the disabled has been modest at best, but large geographic variations in disability employment rates give reason to hope that improvements are possible.

New focus needed on retaining people at work

The current public policy is very often focused on caseloads and budgets, and on supporting the unemployed into work. The new report suggests that an equal emphasis should be given to employment retention and the ‘journeys’ from employment, to sickness absence, to worklessness and possible benefit receipt. In 2015 alone, 350,000 people fell out of employment and transitioned onto health-related inactivity. Each year just under 1 million employees in the UK are on sick leave for 1 month or longer. The likelihood of re-entry to the labour market for these individuals is lower the longer their absence lasts.

Earlier interventions

Building on the employment retention focus, the report criticises the current policy agenda for being too late to engage. A typical trajectory from employment to benefit receipt involves six months in receipt of Statutory Sick Pay, followed by at least three months waiting to be assessed for Employment and Support Allowance (ESA) and then directed towards back-to-work services. While a number of employers offer high levels of rehabilitation services to staff who are experiencing health problems, for many this is a period in which very little happens in the way of support.

Conditional benefits systems have shown little success

As a part of the assessments that people on disability benefits have been subjected under the ESA, a redefinition of disability as a state of permanent, complete incapacity for work has emerged. Those, whose disability may cause only partial or temporary incapacity to work, face new conditionality. The attempt has been to use this conditionality in the benefits system as an incentive to get more people back to work. However, mounting evidence suggests that conditionality in benefits for disabled people is often difficult to apply appropriately and fairly, and shows limited evidence of success in terms of employment outcomes.

Support to help people with disabilities continue in work

This report suggests that the government should expand the Access to Work Programme, which provides grants for practical support that helps people with disabilities gain or retain employment. In the longer term, the government should consider integrating it with the Fit for Work Service as part of a unified occupational health approach. The government should also open up access to and expand the Fit for Work Service to become a bigger instrument for vocational rehabilitation.

Right to return for absentees

In order to implement the new focus retaining employment, the report suggests introducing a statutory ‘right to return’ period of one year from the start of sickness absence. This suggestion is modelled on the right of mothers to return to their job following maternity leave. To encourage progress towards returning to work and to protect firms against the risks of abuse, an employee’s right to return should be conditional on engagement with the Fit for Work Service when an assessment has been recommended. During this right to return period, dismissals on sickness grounds would not be permitted, except in instances where the employee actively disengages from support and rehabilitation.

Disability leave as new category of authorised absence

Sickness absence due to disability is of course different from maternity leave and often consists of several shorter-term absences rather than one continuous spell. The government could make specific reference to disability leave as an example of a reasonable adjustment, or explore options for incentivising employers to introduce it on a voluntary basis.

Incentives for employers

By way of sharpening incentives for employers to engage with supporting a return to work, the government should offer a rebate on Statutory Sick Pay costs to firms whose employees make a successful return to work from long-term sickness absence within one year.

Incentives for job seekers and potential employees

Finally, the report recommends that in order to make the most of the key advantage of Universal Credit – namely to ensure that everyone is better off in work – ‘work allowances’ for disabled recipients should be significantly boosted. As a minimum, they should be restored to the value originally intended, and in the longer term increased.

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A government Green Paper on this topic is due to be published later in 2016.