Reducing sickness absence

340. Rather than implementing the Commission’s proposals, the Norwegian government decided on a different and – in an international perspective – quite unusual route, namely to shift parts of the responsibility for solving these issues to the social partners. With the aim of reducing the outflow from the labour market into health-related benefits and early retirement schemes, a tripartite agreement was signed for 2001-2005 between the government and the social partners to cooperate on strengthening active measures at the workplace – the so-called IW-Agreement. The main idea behind this is that the workplace is the main arena where progress should be made (Box 6.1).

341. Several measures were implemented to achieve the agreement’s objective to reduce sickness absence rates, including the mandatory preparation of a follow-up plan for each employee after eight weeks of absence. The most important instrument appears to be the possibility for enterprises to enter into a cooperation agreement with the National Insurance Administration (NIA). IW-enterprises, which by now cover some 60% of the labour force, benefit from a number of special regulations and from support from the newly-established Workplace Centres of the NIA. Service from these Centres can be comprehensive and include, for instance, tailored management and organisational development assistance.

Box 6.1. The tripartite agreement on a more inclusive workplace in Norway The three specific objectives of this tripartite agreement are:

• To reduce sickness absence by at least 20% from its level in the second quarter of 2001;

• To secure employment for a larger number of people with disabilities; and

• To extend working life.

The social partners have the main responsibility to reach these objectives. The government plays a supportive role as a provider of economic incentives to those employers that make serious efforts to achieve the stated targets. The idea of the agreement is that employers and employees in individual workplaces will cooperate closely in investigating the reasons for the employee’s absence and early retirement and for developing appropriate solutions.

To reduce the sickness absence rate, earlier workplace-related interventions are being introduced in combination with better methods to follow-up on persons on sick leave. Companies are also introducing a “work ability index” to measure the ability employees have in spite of sickness. Further, the government has increased the reimbursement of companies’ expenditures for purchasing health care services and rehabilitation. To improve the employment prospects of persons with limited work capacity, the government has introduced wage subsidies for employers who hire disabled people and a special subsidy for adapting workplaces to the needs of these workers.

Every enterprise can sign a contract with its local social security office to become recognized as an “inclusive workplace enterprise” (IW-company). The National Insurance Service has organised new Workplace Centres in all of Norway’s counties to assist the IW-companies. Such companies have a regular contact person at the Workplace Centre to help them in taking necessary actions and to follow up employees on sick leave. In addition, the health services in IW-enterprises are given a special refund rate from the National Health Service for efforts to bring employees on extended sick leave or disability benefits back to work.

Firms that sign such a contract with their social security office must commit themselves to work systematically to meet the objectives. When an employee is unable to continue her or his job due to sickness or bad health, the employer is obliged to supply training in collaboration with the authorities so the person can be qualified for another job in the company.

Employees are obliged to inform the firm about their own functional capacity when on sick leave, so that relevant measures can be implemented as quickly as possible. The employee should also agree to have a dialogue with the employer concerning changes in work tasks, participation in training or other necessary measures to continue working. In general, the employee should cooperate with the employer in adapting the workplace as required. Employees in IW-enterprises have the right to take sick leave without a doctor’s certificate for an extended period of eight calendar days per period of sick absence, with a total upper limit of 24 days per year. The reason for introducing this rule is to place more responsibility on the employee and the employer since doctors often prescribe sickness certificates for longer periods than is usually necessary.

342. Results from a mid-term evaluation of the tripartite agreement in late 2003 were disappointing. Sickness absence had continued its almost linear increase since the mid-1990s. While the government and the social partners agreed to uphold the agreement for the full period, mainly because the IW-concept has gained considerable support in the Norwegian workplace, restrictive amendments to the sick-pay scheme came into force in mid-2004. These included:

• The introduction of an activity requirement within eight weeks of granting the latest sickness certificate (unless medical reasons clearly exclude workplace attendance).

• An evaluation of the functional capacity of the person on sick leave by a medical practitioner within eight weeks.

• Stricter sanctions on medical practitioners who do not comply with the new rules for sickness absence certification.

343. In the second half of 2004, sickness absence rates dropped sharply, though they seem to have stabilised again one year later at a lower level. In the second quarter of 2005, sickness absence rates were around 10% below the level of the reference quarter for the IW-agreement (second quarter of 2001). Thus, around half of the targeted decline has been achieved. However, this decline has yet to prove to be long-lasting because data suggest that sickness absence is reaccelerating lately. Moreover, there is almost no difference in the trends in absence rates in IW-enterprises and those which have not signed a cooperation agreement with the NIA. Sectoral differences are also relatively small, with the largest declines typically reported in sectors where sickness absence levels had been highest. On the whole, absence is going to have to fall much further if it is to get back to what used to be normal in the 1980s and early 1990s.

344. The timing of the decline in sickness absence rates and the similarity in trends in IW- and other companies suggest that the regulatory amendments have played the key role in triggering a turnaround in the absence trend or at least stopping absence rates from increasing further.54 _{However, it is not known which}

element of the 2004 sick-pay reform has played the crucial role in the reduction of sickness absence.