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Statutory Sick Pay Getting Closer

31/03/2022

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Ireland

This week the Government announced that the long awaited Sick Leave Bill 2021 ("the Bill") had passed Cabinet and would now move through the Oireachtas.

This new law, which will provide for a minimum sick pay entitlement for all workers with over 13 weeks service, was first announced in June 2021. Though the passage of the Bill now seems certain, it is important to note that we still do not have a clear idea of when it will come into force. Once the Bill has passed the Oireachtas the Minister of Enterprise, Trade and Employment will set a date from which the Act will take effect and employers will be expected to comply with it from that date.

Until this new law is enacted, there is no statutory obligation on employers to pay employees who become sick and are absent from work. While most public sector and many private sector organisations already have contractual sick pay arrangements in place, this new law will nevertheless affect a wide range of smaller and mid-sized employers in Ireland and even larger organisations who do not have contractual sick pay arrangements in place.

Employers should be aware of the key details of the Bill and revise their sick leave policies in advance of becoming law.

Payment for Statutory Sick Leave

The new law will require employers to provide employees, who have 13 weeks’ continuous service, with sick leave pay for up to three days of certified sick leave per year. An employee must obtain a medical certificate to avail of statutory sick pay.
This entitlement will increase over a period of four years with the number of days being covered by the scheme going up to seven in 2024 and then to ten in 2025.

Rate of Sick Pay

Sick leave will not be paid at the normal rate of salary. The rate of payment for statutory sick pay will be of 70% of the employee's normal daily wages and capped at a maximum of €110 per day.

Enforcement and Liability for Employers

The Bill provides that where an employee believes that the employer has failed to pay statutory sick pay, the employee can make a complaint to the Workplace Relations Commission (“the WRC”). A WRC determination can include an award of compensation of up to 20 weeks’ of the employee's pay.

Exemption – More Favourable Schemes

The Bill also states that the obligations under the legislation shall not apply to an employer who already provides employees with a sick leave scheme where the terms of that scheme are, as a whole, more favourable to the employee than statutory sick leave. As indicated above, this will effectively exclude many larger private sector and many public sector employees from the provisions of the new law.

Exemption – Financial Difficulty

Fortunately, the Bill recognises that some organisations may not have the financial capabilities to take part in the payment of sick leave in line with the proposed sick leave scheme under the Bill.  

The Bill outlines that the Labour Court may, on application to it by an employer or an employer's representative, exempt an employer from the obligation to pay an employee or number of employee's statutory sick leave payment if the employer can show, amongst other things, that it is experiencing severe financial difficulties. Such an exemption cannot exceed one year, and cannot be for less than 3 months.

We will keep readers updated as the legislation gets closer to fruition.

Written by: David Murphy
 

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Employment