ABSENTEEISM is a major issue for UK businesses with sickness absence alone costing the economy £13.4bn in 2006, according to the CBI.

Apart from the financial cost, absence creates other problems including extra pressure on remaining staff, time spent integrating temporary staff and potential loss of business, not to mention the demands on management time, impact on morale and legal costs if things escalate to an employment tribunal.

While employees with more than one year’s service have a right not to be unfairly dismissed, long-term sickness absence can provide potential grounds for dismissing someone because they are unable to fulfil their contract.

Employees with a long-term physical or mental condition may be entitled to extra protection allowing them to bring a claim without one year’s service.

Usually when contemplating dismissal, the employer will rely on the grounds of capability.

In following a fair capability procedure, the causes and likely duration of an employee’s illness should be investigated. A lot of employment contracts can require sick staff to undergo an independent medical examination.

It is good business practice to try to identify any potential adjustments and improvements that can be made in the workplace or job role to help an employee return to work, particularly in relation to Disability Discrimination Act requirements. Indeed, failure to do this could lead to a DDA and unfair dismissal claim being made.

Throughout the time someone is off you should maintain communication, striking a balance between the employee’s care and the needs of the business, and contact that could be construed as harassment.

If you opt to dismiss, the minimum statutory procedure to follow begins with writing to the employee explaining the issues and that dismissal is being considered. They must then be invited to a meeting to discuss the issues and then be offered an appeal.

Frequent problems that arise when an employer tries to investigate illness include: the employee asking not to be contacted at home; their refusal to attend meetings or to consent to a medical examination.

Try and be as flexible as possible; offer to hold the meeting at their home or rearrange the time. Set a timescale. Inform them that you may make a decision in their absence if they continually refuse to attend.

While following this minimum procedure does not necessarily make the dismissal fair, failure to follow procedure will make the dismissal automatically unfair and could increase any compensation awarded by 50 per cent.

If you are in any doubt, do not risk further cost to your business and seek professional legal advice early.

■ Paul Hargreaves is an employment law specialist with BHP Law. He can be contacted on 0191-221-0898.