We currently operate a discretionary bonus scheme. Should a colleague have an absence of 28 days or more, the absence is excluded from the bonus calculation (bonus is pro-rated).
We are looking at possible alternatives (such as a limit on the number of days absence over a year before being excluded from the bonus payment / excluding only certain types of absences etc), could you please share the approach you take to absences in your bonus schemes?
Secondly, how do you build in checks that absences that are being excluded from the bonus payment are not covered by the equality act?
Thank you in advance
We have exactly the same issue. Group rules state that absences over a month should be deducted. However, in the UK, we do not deduct if it is health related absence. This is to remove the risk of a discrimination claim on the grounds of disability.
This is because, even if we were to go to the effort of assessing likelihood/grounds for disability/claim for each period of illness this still doesn't remove the risk 100%, as you wouldn't know the final outcome until assessed as part of a claim. Hence the pragmatic/commercial/risk averse approach of paying out.
However, if someone else has assessed it and found an alternative then I would be really interested to hear it.
We take a similar approach on bonus only accruing for 28 days absence, on basis bonus is performance related. We also apply bonus deductions if a person receives an absence or disciplinary caution - but we have a discretionary review before that deduction is applied to consider if it was for disability related absence in which case the deduction might be waived.