Research commissioned by work and pensions secretary James Purnell reveals that over 90 per cent of employees with health problems can return to work with proper support from their employer.
It also found that back to work programmes have the ability to significantly reduce long-term sickness absence, saving around £6 billion a year.
Mental ill-health is known to be one of the most common reasons for sickness absence and the study shows that returning to work can actually aid recovery.
Commenting on the findings, Mr Purnell said: "We are looking at how we can work with employers to make sure people get the support they need in the workplace."
Last month, the Chartered Institute of Personnel and Development suggested that tax breaks be offered to employers who provide rehabilitation services such as counselling and flexible working as an incentive.
