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Abuse of sick leave in the Icelandic labor market

On June 5, 2024, an article was published on visir.is in which the alleged misuse of sick leave by employees was discussed, and it was specifically discussed about employees who use their sick leave during their notice period.

The interviewee states that "The medical profession needs to do better. The government needs to make the rules of the game clearer. Employers need to negotiate with the trade unions on these matters. The trade unions need to look at and recognize this negative behavior that has been allowed to happen in Icelandic business life."

The article specifically discussed how an employee who had been dismissed received a sick certificate that excused the employee's presence from working out the notice period with the employer.

Sick leave

The right to sick leave is legislated, and more detailed rights are in some collective agreements. The right to sick leave gives an employee an allowance to be absent with pay based on the rules given in the legislation, and the relevant collective agreement in each case.

Sick leave accrues while the employee is working and is not absolute, i.e. an employee cannot be absent from work indefinitely due to sickness without exhausting their accrued rights. But this does not limit the employee's illness to fixed amount of days, it only means that the employee's sick leave rights end with the employer and they take payments from the union's health fund, from insurance, or sometimes the employee's municipal association, depending on the entitlement status and circumstances in each case.

Consequently, we now know that:

  • An employee's sick leave is covered by many parties in and outside the labor market: the employer, trade union, insurance, and the municipality of the employee in question.
  • Rights to sick leave must be assessed each time for each individual.
  • Right to sick leave gets exhausted as the rights are used.

Sick leave and termination

Regardless of who terminates the employment relationship, a so-called notice period is created upon termination. This is a period during which the employee and the employer are required to maintain the employment relationship beyond the date on which the termination itself takes place, and it is good to keep in mind that:

  • During the notice period, the employee has benefits and rights as if the person were still in an employment relationship.
  • The notice period is negotiable between the employer and the employee.
  • If an employee wishes to work during their notice period, the employer cannot deny the employee the benefits and rights that accrue during this period but has a choice to allow the employee to work during the notice period or to have it paid out.
  • If the employer requests that the employee work until the notice period, then the employee must accede to the employer's wish, within the same rules that apply to a normal employment relationship.
  • A request for how the notice period is handled, should be stated in the letter of termination, or with a signed consent from both parties after the termination of the employment relationship.

Sick leave and sickness certificate

It should be noted that a sickness certificate does change anything regarding an employee's rights to sick leave. A sick certificate only states that the employee will be, or has been, absent due to an illness for a certain period of time.

From this we can therefore state that:

  • Rights to sick leave with the employer remains the same regardless of the sickness certificate.
  • If an employee who has begun their notice period wishes to use their sick leave, and the right to sick leave expires during the notice period, the employee is still considered "in an employment relationship" with the employer, but stops receiving payments from the employer and transfers to one of the other organizations covered by the employee’s sick leave right.
  • An employee on a notice period who has exhausted their sick leave will receive a salary settlement according to the notice period agreement made upon termination of the employment relationship, regardless of their sick leave.

What’s the problem here?

All of us. Employees and employers alike. We are all the blessed problem.

The author of this article has spent the last few years dealing with various issues in the labor market, including examining employer's processes regarding employees' sick leave entitlement, assessing why employee's utilize their sick leave entitlement, and especially possible employees’ long-term sickness from work and the reason for it.

To say that one group is the problem and that particular group needs to be reigned in will only make the situation in the labor market more difficult.

In interviews with employees, it has been stated that there is a lot of anger and frustration in employees in regards on how they perceived they are being treated, and especially when it comes to their sick leave rights. This frustration is expressed in employees who then study the system well, and then show a certain lack of integrity when using their rights to sick leave.

This is something that will not be fixed by restricting access to sick leave through collective agreements or legislation.

Couldn’t you just change the laws regarding sick leave and fix it that way?

No, basic human behavior will go against it.

Do you remember covid? And people's reactions when their freedom of movement was taken away and everyone was told to stay at home? Do you remember how angry we were when some people were at parties toasting in champagne, while the rest of us sat at home and developed an intolerance for Netflix?

Or have you heard stories of people who were walking downtown, walked past a protest there, and got caught by the police? None of those people went quietly with the police, even though these were individuals who were not connected to the protests and therefore had nothing to worry about.

These examples may sound unrelated, but the fact is that when people are used to having certain rights, when those rights are taken away, or when people perceive discrimination against them because of their rights, then people will react badly.

Therefore, a general effort to introduce a negative or difficult change to the rights of employees will only have a negative effect on the entire labor market.

How employers process sick leave

The way employers process employee sick leave says a lot about the workplace culture that prevails in the workplace.

A workplace that requires proof of illness, counts the seconds the employee is absent for, and requires a sickness certificate for every absence due to illness, is a workplace that employees have little loyalty to, have no trust in, and often perceive as a hostile workplace.

A workplace that shows tolerance to its employees, gives flexibility in the case of illness, but takes care to keep a close eye on its employees on all absences, is a workplace that employees feel secure in, employees trust the employer with their health and show great loyalty towards their employer.

Importance of human resources management

This is where human resource management comes in; knowing how to create conditions that are both capable of catching employees who are abusing their sick leave, as well as without punishing employees who are trying to do their best.

It's easy for HR to slip into a position where all employees are mistrusted and treated as the problem by highlighting sick leave as a problem, showing reluctance to support employees, and demanding proof of all sickness absences.

This allows the human resources department to put the onus entirely on the employee to prove that the use of sick leave was legitimately requested, and thus human resources departments treat all absences due to illness as the same thing and look at impersonal statistics or sickness certificates as the only data regarding the absence. This makes absenteeism processes efficient and inexpensive on an Excel sheet, which is something every HR department strives to do.

We also need to keep in mind that this huge demand for sickness certificates is also hurting our healthcare workers, who are already drowning due to overwork and understaffing in their workplaces.

It is important that the employer's human resources department is not tempted to simplify their work and reduce sick leave rights to statistics and paperwork, but to treat each absence due to illness as a specific incident and check each case individually. And of course, it is also the responsibility of the human resources department to teach managers how to properly follow up on absence due to sick leave.

Smaller companies where there is no human resources department, and often the owner or CEO takes care of those matters, should seek support and training in how to properly deal with absence due to sick leave.

Should employers behave as a parent to their employees?

No, not at all!

But, by looking at each individual case of sick leave, the employer begins to see the bigger picture that drives the employee's behavior. This way, the employer can see patterns of behavior that may indicate future problems that could arise either in the workplace or with the employee themselves.

Or in short:

  • An employer can see from the behavior of the employees whether it is due to a problem at the workplace, a problem with the employee, or just an occasional illness.

And showing interest in the occasional employee? It builds trust between employer and employee.

The fact that the employee perceives his employer as trustworthy is completely in the employer's favor!

In conclusion

It should be noted that this article is not written with the person interviewed in the aforementioned article in mind. That is an employer who simply pointed out a situation that is unfortunately well known in the Icelandic labor market, and that person has every right to express their opinion.

This article is written to point out that the problem is not just the employees. The problem is also the employers. This problem is so intertwined between these two groups, that the workplaces that encounter problems due to the sick leave rights of their employees are employers who are also unable to tackle the problem with their internal devices and tools.

Can workers get together and fix the situation? Yes, but only if all employees make the decision to work together and show a united change in behavior.

Writer of this article would rather herd all the stray cats in Istanbul alone, than try to change the behavior of the entire Icelandic workforce in one go.

However, an employer can decide to be the catalyst to build trust and safety in their workplace, and for this, for example, revise their work processes on how absence due to sick leave is handled.

This will be a difficult step because workplace culture is not changed by empty words or policy changes, but by visible changes in behavior over a long period of time, and during change management we often get impatient and want to see changes in conditions immediately. But if this is done right, the employees will in the long run automatically herd together and show a loyal, strong and close-knit group with their employer.

But this is a change that must originate with the employers themselves.

Article first appeared on Vísir 06.06.2024 [link].