The government is making tough changes to policies relating to the long term unemployed and sick, with the stated aim of tightening up the system and getting more people back into the workplace. The changes have been hailed as a "triple-win"; more people with a job, reduced costs for employers, and a more financially secure future for the country as a whole. But will this really be the case? Many argue that the changes are overly punitive on the individuals concerned, and are likely to have a significant impact on employers too.
Last week the government launched its "Help to Work" scheme, requiring anyone on the government's current 'Work Programme' who has not found a job after two years, either to accept a community work placement, visit a Job Centre each day, or to undertake further training in order to continue receiving payments of Jobseekers Allowance (JSA).
The Employment Minister, Esther McVey, insists that the new scheme is not designed to punish those who are unemployed, but instead is intended to help them to find new work and 'fulfill their potential'. However, those who refuse to take part in the new scheme risk seeing their payments of JSA being suspended for one month, and three months for any second refusal.
However, it is not only jobseekers who may feel the effect of the government's changes. One change that may have a particular impact on employers is the decision to abolish the Percentage Threshold Scheme (PTS). With effect from 6 April 2014, employers are no longer able to reclaim from the government payments made to their employees as statutory sick pay (SSP). This means that the cost of all SSP paid to employees will now fall entirely on the employer, which is likely to be a significant financial loss for any employers with employees on long-term sick leave. The government's rationale is to inspire employers to manage sickness absence in the workplace more proactively, encouraging those off sick back to work sooner, and therefore increasing the overall economic output of the employer.
The money being saved by scrapping the PTS reimbursement scheme is to be reinvested into funding the new "Health and Work Service", which will provide both employees and employers with access to occupational health advice and support. After four weeks of sickness, a GP can refer patients to this central service to be assessed and advised on how best to stay in or return to work. For many big businesses, already with access to occupational health professionals, little benefit may be seen but, for small businesses, additional help such as this may prove to be a great support.
Finally, regardless of these changes, the emphasis for employers should remain on supporting employees to get better and back to full health, and not solely on getting them back into the workplace. Whilst the cost of covering SSP may be an incentive for an employer to encourage employees back to work, forcing employees back before they are well could prolong any complete recovery, and in the long term end up costing the employer more.
With thanks to Antonia Lyne, trainee at Farrer & Co, for contributing to this article.