Many of you will be aware that the long awaited ‘Sickness Absence Review’ report and recommendations was recently published. The report’s lead authors are David Frost (the former DG of the Chambers of Commerce) and Dame Carol Black.
With all the other work that I have been doing around Pension Reform, I have yet to have a proper look at this. However, the attached link to ‘The Telegraph’ coverage earlier this week picks up some important points, many of which I am sure we will be covering on the blog over the coming months:
The points that really jump out at me from a benefits perspective are numbers 4, 6 and 8.
My thoughts (which I would stress are based purely on the coverage above at this stage) as follows:
Point 4: Allowing employees on sick-leave to be dismissed (in exchange for a lump sum settlement) could be a great move, as this will remove one of the principle obstacles for employers in providing Group Income Protection (GIP) cover to employees.
The lump sum settlement idea ties in neatly with what happens in practice for many of the longer term claims under GIP policies anyway, so logically the cost of the dismissal lump sum could sit with the insurer rather than the employer. This in turn could make GIP a much more popular benefit for employers to provide, which would mean that many more employees and their families would benefit from this important cover, whilst employers would be protected from long term absence costs and/or moral dilemmas.
Point 6: Proposing some measure of tax-relief for employers who provide medical benefits or rehabilitation schemes to staff is hugely important. This is something that many in the industry (including myself) have been suggesting for some years, as this will help incentivise employers to take the major step of providing such cover for the first time.
It’s good news that this is now being officially tabled by the report.
Point 8: I think it’s well established in most employers minds now, that an early return to work will often help the employee recover from illness or injury more quickly.
This is something that the Group Income Protection (GIP) market has been actively promoting for some years now, and there is much evidence to support this claim. Indeed, the GIP providers are very active in supporting claimants back into the workplace, which helps control their costs, and in turn contains premiums for employers also.
So, on the face of it, much to be welcomed, but we will comment further once we have had a chance to absorb the report more fully.
Best regards
Steve
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