I have an employee who calls out sick on a regular basis.  If someone is sick in the office, they'll be sick the next day claiming that person got them sick.  This employee is never able to take vacation because he never accumulates enough PTO time due to all his ailments.

I do know he is a cancer survivor but has been in remission for several years. There is also question that he's an alcoholic and comes into work smelling of alcohol.  Since he works off site I do not have personal knowledge but it has been reported to me.  I feel that this is having affect on his co-workers and morale. 

I have had one employee that has complained about it on several occassions, however he is considered the complainer of the group so my boss doesn't usually take him seriously.   This last time the employee called out sick he used the excuse that he caught whatever bug the "complaining" employee had.  This seriously offended the "complaining" employee because he was not sick or complained about being sick and does not understand why he was used as the excuse.

We do not make it policy that an employee see a Dr. if he is calling out sick but can I if it tends to be an issue?

Perhaps you should look at this situation more objectively; there is a lot of conjecture in your statement based on hear say.

You don't mention the employee's performance.  How have his reviews been? Is he meeting all goals? Or is his performance suffering because of his absences and perceived alcoholism? Did the "complainer" complain because the employee is not keeping up with his work?

Seems like he has not exceeded his PTO time because he does not take vacations.

Perhaps he has been told that he has a weakened immune system and this frightened him and is causing his absences. And being a cancer survivor can make one more cautious.

I would review this situation more before taking the action you mentioned.

Thank you for your feedback.  

His performance is average and the goals are more "team" goals instead of "individual" goals.  Therefore, I feel it is effecting team morale.  The "complainer" complains because the employee is late to work, calls in using the excuse that somebody else made him sick.  The last one he said someone made him sick who wasn't even sick.  It is mainly the lack of professionalism.  Although the "complainer" complains or voices his opinion he does so because he feels he can (which he can) and a majority of the time has a valid complaint.

The employee recently had his review.  Our employees are expected to review themselves and the owner also reviews them and they discuss it over lunch.  In his review he even stated "Poor punctuality, plitical mistakes and misunderstandings may have limited my career"

I do not think he is a "poor" employee but I feel I need to do something to turn this behavior around.

jclan:

I do not think he is a "poor" employee but I feel I need to do something to turn this behavior around.

Which behavior are you talking about?  The drinking or the being sick?  Here are some things to think about...

Have you investigated the employee for alcohol levels at work?  Do you have a drug policy that includes alcohol and stipulates the Company's right to test in reasonable suspicion situations?  If so, why have you not done that?  If not, what have you done to correct that?

Does your Company have FMLA requirements?  Does it have them in some places and not in others?  Do you know the status of the employee's potential to be qualified for FMLA coverage if the Company is burdened by FMLA compliance requirements?

Team morale is the team leader's problem, not yours.  Make sure the team leader is informed and be available to help him or her.  As soon as people start talking about being offended over such twaddle (how does the complainer know he was the alleged source of the plague?), I start talking about growing up.  This isn't just one guy being sick and another guy being offended that he was reportedly the source of the disease.  This is about two people behaving in a silly manner that is distracting from the purpose of their employment and a burden on HR resources and it should be nipped in the bud rather than fostered.

How do you know the episodes of calling in sick or due to anything other than sicknesss?  Medical notes won't tell you much these days because the doctor's now pretty much say "so and so is under my care and is approved to return to work on <date>" and they don't have to tell you anything more and often can't.  You won't get, and you are not entitled to, medical information unless this is an ADA fitness issue or a FMLA cert situation.  Beware improper medical inquiry under ADA.