Employee absences can be both costly and disruptive.

It is advisable to have systems in place to measure and analyse these costs so that you can identify problem areas. Are there patterns of absence? Does a particular department have a below average record?

Unhappy, demoralised employees are more likely to take time off work. Workplace stress is still the most common cause of long-term sickness among non-manual workers. Creating a friendly working environment, where staff feel valued as part of a team and where flexible, ‘family friendly’ policies are in force is likely to pay dividends, keeping absenteeism to a minimum.

To manage absence effectively, make sure staff are well informed as to your sickness policy and procedures. Make sure these are seen to be followed and keep accurate records. These must be kept for at least three years after the appropriate financial year-end.

When hiring new staff, make sure you check their attendance record with the previous employer. If new staff are absent it is good practice to make sure you know if there are problems preventing them from settling in. How staff are treated in the first weeks of a new job is vital. Inadequate training can leave them feeling disillusioned.

It is sensible for employers to ensure that contracts of employment allow them the right to get an independent medical assessment in the event of an employee taking more than a few days off work. You may consider requiring all potential employees to undergo a medical examination with an occupational health adviser.

As a matter of company policy always carry out a ‘return to work’ interview. This may range from ‘hope you’re better, we missed your contribution’ to an identification of underlying problems that will affect your management strategy. It may also deter malingerers.

Long-term sickness must be handled sensitively. You must have an employee’s permission to apply for a medical report. It is vital to keep in touch so that the employee doesn’t feel isolated. Consider referring them to an occupational health specialist. This can identify ways of helping them return to work and give you information as to how long the absence is likely to last.

Disciplinary action for unacceptable absence must be distinguished from dismissal on health grounds. Employers need to be aware of the full range of conditions that count as a disability for the purposes of the Equality Act 2010. Where an employee is suffering from a condition covered by the Act, reasonable adjustments must be made to help them return to work.

As regards the accrual of holiday pay when a worker is on long-term sick leave, the Government is in the process of amending the Working Time Regulations 1998 (WTR) to enable workers to carry forward four weeks of their statutory holiday entitlement to the next leave year if they are unable to take it in the current year owing to long-term illness. This is necessary in order to ensure that the WTR comply with recent European judgments on the correct interpretation of the EC Working Time Directive, which the WTR implement into national law.

In a further decision on this topic (KHS AG v Winfried Schulte), the European Court of Justice (ECJ) has now ruled that the precise terms of the provisions regarding the carry-over of untaken holiday leave for workers who are on long-term sickness leave are a matter for individual Member States. However, the carry-over period for taking any entitlement to holiday accumulated during the sickness absence must be more than any leave reference period, but national law which limits the period to, say, 15 months may be lawful under EU law. The ECJ stressed that the entitlement of every worker to paid annual leave must be regarded as a particularly important principle of EU social law from which there can be no derogations and whose implementation by member states must be confined within the limits expressly laid down by the Working Time Directive.

Dealing with long-term absences, in particular, is a difficult area of the law. Each case must be decided on its own merits and proper procedures must be followed. Employers who have not done so for a while are advised to review stress management and long-term absence policies and procedures so that potential problems are identified early on and remedial action is taken as soon as possible.