21 April, 2022
The news has carried reports on the recently published Sick Leave Bill 2021. It intends to legislate for the first statutory sick pay scheme for all employees, both in the public and private sector.
It appears that employees’ unions have largely welcomed the Bill, but it has been subject to some resistance from employers’ representatives.
Employees, due to current Social Welfare legislation, have never before been entitled to statutory payment during the first three days of a medically certified absence.
The definition of “wages” under the Payment of Wages Act 1991 includes sick pay “whether payable under his contract of employment or otherwise”. However, in the absence of any statutory right to sick pay heretofore, the entitlement under that Act generally only arises where an employee has a contractual right to sick pay. Something that will likely not be overlooked by employers is the proposed rate of payment equating to an estimated 2.6 per cent increase in payroll costs, as per the Regulatory Impact Assessment of the Bill.
It is intended that the “sick pay scheme”, as it has been described by the Tánaiste and Minister for Enterprise, Trade and Employment, will be phased in over a four-year period. Employees will be able to avail of three days’ sick leave pay when the Bill is enacted, increasing to five days in 2024, seven days in 2025 and ten days in 2026. Although not included in the Bill, the Tánaiste has made it clear that there will be a cap on the level of sick pay entitlement under the Scheme, with employers being required to pay up to 70 per cent of an employee’s daily pay. This is subject to a maximum sum of €110 per day. The Bill sets out that calculation of an employee’s pay must include any pay in excess of basic pay in respect of shift work, overtime or hours worked on Sunday.
At the launch of the Bill on the 9th June 2021, the Tánaiste said, “Ireland is one of the few advanced countries in Europe not to have a mandatory sick pay scheme…”.
On the face of the Bill, it appears that there are three steps required for an employee to benefit from statutory sick leave as follows:
(i) 13 weeks’ service with the employer
The legal basis for an employee to have 13 weeks’ service with an employer to benefit from statutory sick pay is unclear. This is particularly so given that if an employee has a contractual entitlement to sick pay, that employee can obtain redress from the Workplace Relations Commission by way of the Payment of Wages Act in the event that sick pay is withheld, irrespective of any period of service. In the Heads of Bill the service requirement was six months but this has been almost halved in the Bill.
Interestingly, the Joint Committee on Enterprise, Trade and Employment’s Report on the Pre-Legislative Scrutiny of the General Scheme of the Sick Leave Bill 2021 recommended that all employees be entitled to statutory sick pay, particularly where employers can request medical certification, without any minimum service requirement.
(ii) To suffer from an “illness” or “injury”
To avail of the Scheme, the Bill requires that a registered medical practitioner certify an employee as “unable for work”. The Bill then refers to an employee being unable for work due to “illness” or “injury”. This leads to the question, what is an “illness” or “injury” in law? There is currently no definition of “illness” or “injury” in the Bill.
(iii) To provide the employer with a medical certificate
The Bill is clear that even where an employee avails themself of one statutory sick leave day, a medical certificate signed by a registered medical practitioner is required. The responsibility for providing the certificate is on the employee, and the employer does not have to bear the cost of that certification process.
In practice, by way of example, an employee who takes one day’s sick leave on ten separate occasions throughout the course of the year (as will be permissible in 2026) is required to provide a certificate from a registered medical practitioner for each absence. The employee is liable for the costs incurred – unless they have a medical card or an alternative arrangement with their employer. In this regard, the Joint Committee recommended that some form of rebate for the cost of the medical certificate should be made available to employees, particularly low paid employees. Ultimately, it would seem possible that the requirement for medical certificates could render the Scheme inoperable if employees end up paying over half of the pay for the purposes of obtaining a medical certificate.
There are numerous other aspects of the legislation to be debated and this article merely touches on some of the most pressing issues. For example, of further interest to both employers and employees is the potential redress available under the Bill that the WRC can award if there is a breach of the legislation by an employer. The redress can be up to 20 weeks’ renumeration despite the maximum statutory entitlement under the scheme being no more than 10 days (at a specified rate) by 2026. By way of further example, the Bill provides that businesses will be able to avail themselves of an exemption from the sick pay requirement, in specified circumstances – of which severe financial difficulties will be one (similar to the provisions of section 41 of the Minimum Wage Act 2000). However, unlike that Act, there is no provision in the Bill for an employee to be compensated by way of the Social Insurance Fund.