New regulations aim to curb sickness absence

For several years, employers have been pushing for amendments to the legislation in order to restrict opportunities for the abuse of sick leave certificates as issued by medical doctors to justify employees’ absence from work. Dishonest use of such certificates has emerged as a significant problem in the context of increased competition and labour shortages, which are forcing employers to improve productivity and employees to work harder. Frequent and lengthy cases of illness are particularly characteristic among public sector employees who have problems performing their jobs.

Legal context

In accordance with Latvian legislation, employees must justify their absence from work by obtaining a sick leave certificate issued by a general medical practitioner.

Under the Law on Maternity and Sickness Benefits, which came into effect on 1 April 1996, once an employee obtains a sick leave certificate and an employer’s confirmation regarding absence from work, they have the right to claim sickness benefits, amounting to 80% of their average earnings. The employee can obtain benefits from the fifteenth day of work incapacity until they are able to return to work, or until the date that invalidity status is conferred; the cut-off point for receipt of sickness benefits is no longer than 52 weeks from the first day of work incapacity if the period of absence is uninterrupted, or no longer than 78 weeks over a three-year period if the incapacity to work reoccurs at intervals.

The government regulations, ‘Procedures for determining sick leave certificates’, stipulate that a general practitioner or doctor’s assistant can unilaterally determine work incapacity for the entire period of absence. The regulations do not stipulate the length of a recuperation period after which a person must be referred to the State Commission of Physicians for Health and Work Capacity Examination (Valsts darba ekspertizes arstu komisija, VDEAK) for expert assessment of their invalidity.

Article 109, paragraph 3, of the Labour Law stipulates that employers do not have the right to terminate employment contracts during an employee’s period of temporary work incapacity; the law does not set out restrictions regarding the duration of work incapacity.

False use of sick leave certificates

The abuse of sick leave certificates, based on the unjustified issuing of such certificates, is emerging as a growing problem in Latvia. This has raised concerns among both employers and government institutions, since both are incurring losses resulting from such abuses.

The dishonest practices were uncovered by an analysis of the State Social Insurance Agency (Valsts Socialas apdrošinašanas agentura, VSAA) on sickness benefits, and through information from employers on the use of sick leave certificates, compiled by the Medical Care and Work Incapacity Examination Quality Control Inspectorate (Mediciniskas aprupes un darbspejas ekspertizes kvalitates kontroles inspekcija, MADEKKI). VSAA data show that, every year, the total number of work incapacity cases and their duration is increasing, as is the amount of government social insurance spending on sickness benefits. In 2001, €13.5 million was paid out by the government on sickness benefits; in 2005, this figure almost tripled to €38.8 million.

Lengthy periods of illness have become particularly prevalent among employees of government services, who experience problems in performing their jobs or who are threatened with dismissal, as well as among those involved in legal proceedings.

Proposals by Ministry of Welfare

In an effort to eliminate the unjustified issuing of sick leave certificates, the Ministry of Welfare has proposed that it should become mandatory for general practitioners to refer patients to specialists after 60 days of work incapacity, in order to assess whether or not the patient should continue to be classified as being incapable of work.

In cases where work incapacity lasts for a period of six months or more, the general practitioner would have to refer the patient to the VDEAK, which would in turn decide whether or not the status of invalidity should be conferred.

The ministry is also proposing the introduction of a new cause of temporary work incapacity cited in sick leave certificates – namely, road accidents – in order to facilitate the recouping of sickness benefits by victims of road accidents.

In June 2006, the Ministry of Welfare submitted the draft amendments to a meeting of government secretaries; however, the amendments are only now being prepared for submission to the cabinet. It had been expected that they would be reviewed by the end of 2006.

Commentary

The dishonest use of sick leave certificates is emerging as a growing problem in Latvia, as competition is forcing employers to improve productivity, while labour shortages compel available employees to work harder.

The Ministry of Welfare believes that the introduction of new regulations will motivate workers to return sooner to the labour market; this will reduce the number of people who claim invalidity and reduce the proportion of the government budget spent on sickness benefits and cutting employers’ costs. Until the new regulations are adopted and implemented, it is likely that gaps in the current legislation will continue to be exploited. Owing to the fact that government institutions appear to have little interest in the validity of sick leave certificates issued to their employees, government representatives seem to be in the best position to exploit the weaknesses of the current legislation.

Employers had been pushing for stronger regulations restricting the dishonest use of sick leave certificates for several years. The problem has been further compounded by the recent rise in wages. At the same time, trade unions are also supportive of amendments to the legislation, which will help to prevent such abuse.

Raita Karnite, Institute of Economics, Latvian Academy of Sciences

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