How to Build a Sickness Absence Policy For a Small Business

One of the non-negotiable prerequisites for any small business is having a clear, strong, and easy-to-understand sickness absence policy. Without one, ad hoc or verbal agreements can very easily lead to confusion, unfair treatment or even legal risk.

A written policy helps employees know what’s expected, and ensures HR actions follow a consistent process. UK employers must comply with statutory sick pay (SSP), fit note rules and equitable treatment under the Equality Act.

What makes a good sickness absence policy?

A good sickness policy (for a business of any size) balances care with clarity. Your policy should support people when they are unwell, while also still protecting business continuity. 

The sickness policy defines procedures for short‑term absence (a few days) and long‑term illness (weeks or months). It covers sickness reporting, pay entitlements, contact arrangements, medical evidence, return‑to‑work conversations and triggers for further steps.

What to include in a sickness policy for small businesses

Here’s a checklist of what your sickness policy should cover:

• How employees must report sickness (who to call, by what time, and what information to provide, plus any other specific business requirements)

• Requirement for self‑certification up to seven calendar days, and when a fit note is needed beyond that

• Statutory Sick Pay entitlement rules, plus any contractual sick pay your business offers

• Your company’s procedure for return‑to‑work interviews after each instance of absence

• An attendance tracking system and where absence records are stored

• How long‑term illness will be handled at your company (e.g. regular contact, possible occupational health referral, phased return plans)

• How pregnancy‑related illness or disability‑related absence is handled to meet legal duties

• Disciplinary thresholds or trigger points for persistent short‑term absence (including any methods like the Bradford Factor)

• Company guidelines for a communication plan during sickness and what support will be available upon the employee’s return

Short-term vs long-term absence

It helps to define these terms in your policy clearly, so there’s no confusion for you or your employees. 

Short‑term usually covers absences up to a week, where self‑certification applies (and the employee doesn’t necessarily need to go to see a doctor). If someone misses more than seven calendar days in a row, they must provide a fit note from a GP or other recognised healthcare professional.

Long‑term absence usually refers to time off beyond a few weeks. Your business should state how contact will be maintained, whether they require medical updates, and how they will enable a phased return or workplace adjustments.

Sick pay (SSP and beyond)

By law, employees who earn above the lower limit must receive Statutory Sick Pay, currently £118.75 per week for up to 28 weeks. It kicks in from day four of a period of absence. The first three days are unpaid unless contractual terms say otherwise.

Some businesses choose to top up sick pay beyond SSP. If yours does, make sure to outline how much is paid, for how long, and how it interacts with SSP. Make it really clear who is eligible and what conditions apply—it’s helpful to have a guidebook or at least a statement employees can refer back to in their onboarding handbook.

How to report sickness and keep in touch

Make sure your employees know that they should notify their manager by phone before their shift starts if they’re going to be off sick. Typical rules we recommend adding to your sickness policy include stating what’s wrong, how long they expect to be off, and how to reach them. That sets expectations and avoids ambiguity.

For absences longer than a week, it’s smart to require progress updates at agreed intervals. Keep the tone supportive, not disciplinary, and always encourage employees to be as open and honest as possible. This helps maintain engagement and clarity, and also encourages more open communication that can help the whole team work more smoothly.

Return‑to‑work conversations

It’s always a good idea to arrange a brief chat when employees return from any period of sick leave. That helps you understand causes and spot recurring patterns, and also shows genuine support. Avoid assumptions or any imposing questions, and simply frame it as a routine check-in to see how they’re doing.

Dealing with persistent absence

Your policy could set trigger points for recurring short‑term sickness. For example, three one-day absences in a month might prompt a conversation, or fewer for smaller teams. Keep records to illustrate frequency and duration.

This process shouldn’t be used for illness-handling alone; support options should always be offered alongside.

Protect yourself against potential pitfalls

A good sickness policy avoids being vague or inconsistent, and states all rules clearly and concisely. 

Leave room for special circumstances like chronic health conditions or pregnancy, and make sure there are allowances for changing circumstances and personal situations. Ensure your managers understand legal obligations too, otherwise you risk unfair treatment or grievances.

Don’t penalise employees for reasons beyond their control—not only is this a waste of your time, but it can sow seeds of discontent and create an “us vs them” mentality between staff and HR. Don’t require annual leave during sickness, and avoid treating self‑certification days as optional unless you have explicit rules.

Why a sickness policy matters

Without a written policy, informal practice leads to misunderstandings and even potential legal risks. 

HR advisers and tribunals expect consistent treatment, and a written set of rules helps you make sure this is always the case, for all employees. A proper absence policy shields your small business from potential legal disputes, and shows employees you take their wellbeing (and not just their productivity) seriously.

Final thoughts

A sickness absence policy is essential for small UK businesses, and should be one of the first steps any HR department undertakes. 

A good policy combines legal compliance with a fair, empathetic framework. A well-crafted policy avoids confusion, supports wellbeing and helps teams run smoothly—even when someone falls ill.

Need help drafting or updating your policy?

We will help you create a clear, compliant sickness absence policy that fits the size and rhythm of your business. Let us take the stress out of HR so you can focus on what you do best—get in touch today.