Were you paid in the UK during the absence in question? Did your family, if you have one, stay back in the UK during this absence? Did you maintain and continue paying for accommodation in the UK for this period? Did your child(ren), if you have any, continue attending school in the UK while your were away? Did your (dependant) spouse, if you have one, continue to remain in the UK and if employed did he / she continue working?
When caseworker discretion is involved one should provide additional evidences (in addition to the generic employer letter) to convince the caseworker that "continuous residence" in the UK was not broken and discretion should be applied in your (applicant's) favour.
You may wish to consider applying again (for settlement) by post closer to the expiry of your current leave - with additional documentary evidences as outlined above. In the unfortunate event that you be refused again, you will then be able to appeal and prove your point in court. Alternatively, you may wish to submit a request for Judicial Review
(do note that requesting a judicial review will not extend your current leave).