When the Employment Rights Act 2025 was announced, one of the changes that generated the most discussion among employers was the introduction of day-one statutory sick pay.
For some organisations, the concern was immediate. Would employees take advantage of the change? Would absence rates increase? Would businesses face higher costs and greater disruption?
These are particularly relevant questions for smaller businesses operating with lean teams and limited capacity. However, according to Debbie Davidson, Director & Lead Consultant at Davidson HR Associates, the bigger question may not be how many people take sick leave, but what their absence is telling you about your organisation.
As Debbie explains:
“Day-one statutory sick pay is one of those changes that is going to land very differently depending on the culture you’ve already created.”
James Leavesley, CEO and Founder of Cultiv8tiv, sat down with Debbie to discuss how the Employment Rights Act might affect absentee rates. During the conversation it became clear that not all organisations will experience the legislative change in the same way when it comes to staff absences and sick pay.
Healthy cultures should not fear the change
One of the assumptions that often emerges when discussing sick pay reform is that employees will be more likely to take time off simply because they can. Debbie challenges that idea as she believes:
“In organisations where people genuinely feel valued, I’m not convinced we’ll see a dramatic spike in absence. People who are respected and engaged don’t suddenly decide to malinger because the legislation changed.”
This reflects a broader truth about workplace culture. Employees who feel trusted, supported and connected to the organisation rarely make decisions that intentionally damage the business as their relationship with work is shaped by more than policy. What the legislation does remove is the pressure many employees have historically felt to attend work when they are unwell because they cannot afford not to.
For organisations focused on productivity, this raises an important consideration. Presenteeism has often been treated as a positive sign of commitment, but the reality is usually very different. Employees who are unwell, exhausted or disengaged rarely perform at their best and, as Debbie puts employees turning up just to be present is “not a productivity win.”
When absence becomes a symptom
Debbie believes the picture changes when organisations already have challenges around engagement, trust or wellbeing. Many businesses have spent years treating absence as the issue itself. Policies have been introduced, trigger points established and monitoring increased. Yet in some cases, the underlying causes remain untouched. The new legislation may shine a light on these hidden issues, as Debbie explains:
“With the changes to legislation, suddenly there’s a clearer view of what’s really going on underneath.”
This is where the conversation moves beyond compliance and into culture. If employees feel unsupported, undervalued or disconnected from the organisation, removing financial barriers to sickness absence may simply reveal problems that already existed, as Debbie explains:
“In a difficult culture, absence rates will continue to climb, not because people are suddenly sicker, but because they no longer have a financial reason to turn up somewhere that makes them feel unvalued or disengaged.”
For leaders, this represents a significant mindset shift. Rising absence may not always be a people problem. It may be a culture problem.
Listening to what absence is telling you
One of the recurring themes emerging from our conversations with HR leaders is the importance of looking beyond the headline numbers. Absence data can be useful, but it only tells part of the story. Understanding why people are absent is often far more valuable than simply measuring how often it happens. Debbie explains that in cultures where people feel unvalued absenteeism is employees way of “telling you something important. Smart employers will listen.”
It’s this learning where organisations have an opportunity, rather than seeing day-one sick pay as a compliance challenge, leaders can use it as a source of insight. Patterns of absence can highlight issues relating to management, workload, communication, wellbeing or trust that may otherwise remain hidden.
The organisations that respond with curiosity are likely to gain far more value than those that simply tighten controls.
The role of management and consistency
The answer, according to Debbie, is not the removal of attendance management processes. It is the quality of those processes and how they are applied. Policies that are inconsistent, poorly communicated or perceived as punitive often create friction rather than improvement.
By contrast, organisations that engage employees in the process and apply attendance policies fairly tend to see very different outcomes. Debbie shares insight from her own work as she says:
“Our clients report that with an engaged, consulted on attendance management policy and process applied consistently, fairly and kindly, their short term absence for minor reasons has reduced by up to 60%.”
This highlights something that is often overlooked in conversations about absence management, the goal should be about creating an environment where people feel supported, trusted and treated fairly. When that happens, attendance often improves naturally.
Looking beyond compliance
The Employment Rights Act 2025 will undoubtedly change how organisations manage sickness absence. For some businesses, that may feel uncomfortable. For others, it may create additional operational challenges.
However, Debbie’s insight points towards a bigger opportunity as day-one sick pay is unlikely to create cultural problems that do not already exist but it may expose them more clearly.
For organisations willing to listen, that visibility can be valuable. The businesses that thrive under the new legislation are unlikely to be those with the strictest absence policies. They will be the ones that understand the connection between culture, engagement and attendance, and use that understanding to create workplaces where people genuinely want to be.
Businesses that are unsure of their current culture and how it might be setup for these legislative changes should consider conducting a culture assessment, while a HR consultant like Debbie Davidson and the team at Davidson HR Associates can help ensure policies are in place to help manage absent rates.