Ireland is late to the party from a European standard, but the Sick Leave Bill finally passed all stages of the Oireachtas last week and has been sent to the President for signing.

Ranking ahead of only Malta in one comparative study of sick pay across 42 European countries, Ireland is lagging behind our neighbours without a SSP scheme for employees. It is estimated that approximately half of private sector employees do not have access to paid sick leave.

In this EY Law insight, Deirdre Malone, Partner, and Laura Ryan, Solicitor, in the Employment Team at EY Law examine the imminent legislation and detail employers’ obligations to ensure that they are ready to comply with this new legal obligation.

Purpose of the Bill

The purpose of SSP is to ensure all employees will have the same base-line protection while absent from work due to illness.

What Will a Statutory Sick Pay Scheme Look Like?

• Employees with 13 weeks’ service will be entitled to 3 days of paid sick leave in one year.
• Sick days may be taken either consecutively or non-consecutively during the year.
• Employees will need to produce a medical certificate from the first day’s absence.
• Employees who avail of sick leave will be protected from penalisation and should be treated as if the were not absent from work, such as while on annual or maternity leave.

How Much Money Will Employers Need To Pay?

Employees will be paid SSP based on a percentage of their day’s pay, subject to a maximum amount. These values will be set out in Regulations (not yet published), but it is widely reported to be 70% of an employee’s wage, subject to a maximum of €110 per day. These figures are based on the mean average salary of approximately €41,000 gross a year.

The Minister will also have scope to direct maximum daily amounts in recognition of employees who receive board and lodgings, or for those who receive additional pay for shift work, Sunday working or other premium pay.

Will It Be Limited To 3 Days A Year?

While the Bill provides for three days paid leave in 2022, it is intended to increase the number of days incrementally as follows:

2024       5 days

2025       7 days

2026      10 days

This gives smaller employers still recovering from the impact of the pandemic, Brexit and inflation the chance to plan ahead and budget for this additional cost.  The Minister will consider a variety of factors before ordering employers to increase the number of SSP days.

Must Employers Comply with The Legislation?

Many larger employers already have favourable paid sick leave benefits in place for their employees. Employers will be able to offer the same or more favourable sick leave benefits to employees. Employers cannot offer less favourable terms than those in the draft legislation.

Objective factors including minimum service requirement, the amount of sick leave and the number of days that an employee is absent before the benefit will commence, will be taken into account in assessing whether an employer’s policy is equal or more favourable than the draft legislation.

Affordability?

Feedback from small employers since the publication of the Bill has consistently criticised the cost to businesses. Employers are conscious that they will need to pay an absent employee and potentially pay another employee a premium to cover the absent employee’s work.

Employers experiencing “severe financial difficulties” may apply to the Labour Court for an exemption from the payment of SSP for a period of between 3 to 12 months. The spirit of applying for this relief is based on engagement with employee representatives and presenting an agreed application to the Labour Court for this relief to protect the potential loss of jobs.

Protection and Redress

Employees cannot be penalised for exercising their entitlement to SSP. Penalisation is defined and includes suspension, lay-off, demotion, transfer of duties, reduction in wages/hours etc as well as dismissal. In the event of dismissal, an employee will be permitted to seek relief under the Unfair Dismissals legislation, with the usual remedies available.

If an employee believes that their employer has failed to comply with the legislation, they may make a complaint to the Workplace Relations Commission. The maximum compensation available is 4 weeks’ remuneration. There is also a right of appeal to the Labour Court.

Records

Employers must retain a specific record of employees who avail of SSP for a period of 4 years. A failure to do so will be an offence, subject to criminal prosecution and a fine of up to €2,500.

What Should Employers Do?

For most employers, sick leave will be referenced in the contract of employment and the absence policy. Many employers will require a medical certificate on the third day of continuous absence. Thought will now be required around the requirement for employees to produce a medical certificate on the first day’s absence before they will qualify for statutory sick pay.

With the President’s signature in sight, it is important for employers to review and consider their contracts and policies to ensure that they align fully, at a minimum, with the (almost) new legislation.

Employers without any paid sick leave should revise budgets for 2022 and consider what their minimum sick leave plan will be. The concept of statutory sick pay is here to stay. Sick pay will get better – so future proof your business’ position on what benefits it offers to your people.