What are an employee’s entitlements under the Sick Leave Act 2022? 

The Sick Leave Act 2022 (the Act), which came into force on 1 January 2023, provides that employees who have completed at least 13 weeks’ continuous service with their employer are entitled to statutory sick pay (SSP), provided they submit a medical certificate confirming that they are unable to work due to illness or injury.

SSP is paid by the employer at 70% of the employee’s normal pay, subject to a daily maximum of €110.

Originally, employees were entitled to three days of SSP per year, but this increased to five days per year from 1 January 2024. While further increases to seven days in 2025 and ten days in 2026 were originally envisaged, these increases have been deferred by the Government.

Does an employer have to pay SSP if it has its own sick pay scheme? 

It depends. The Act provides that where an employer operates a sick leave scheme that is as favourable as, or more favourable than, an employee’s statutory entitlements, the employer’s scheme “shall be in substitution for, and not in addition to” the entitlements under the Act.

The Act further states that its obligations do not apply to employers who provide a sick leave scheme “where the terms of the scheme confer, over the course of a reference period set out in the scheme, benefits that are, as a whole, more favourable to the employee” than SSP. In determining whether an employer’s scheme is more favourable than statutory entitlements, the following factors must be considered:

• the period of service required before sick leave becomes payable;
• the number of days an employee must be absent before sick leave is payable;
• the period for which sick leave is payable;
• the amount of sick pay payable; and
• the reference period of the sick leave scheme.

Have there been any WRC cases which provide more guidance as to when an employer’s sick pay scheme is more favourable? 

Yes, over the past three years, a number of employees have brought complaints to the Workplace Relations Commission (WRC) arguing that they should be entitled to SSP. The WRC’s decisions provide useful guidance on assessing whether an employer’s sick pay scheme is more favourable than statutory entitlements.

The first case taken under the Act was Karolina Leszczynska v Musgrave Operating Partners (ADJ‑00044889). In that case, the complainant was absent for four days but received sick pay for only one day because the employer’s sick pay scheme, although it provided eight weeks full pay, included three unpaid waiting days. The Adjudication Officer found that while the three‑day waiting period placed employees at a disadvantage for short absences, this was outweighed by the significantly more generous provision of up to eight weeks paid sick leave in a 12‑month period, compared with the statutory entitlement to SSP. The Adjudication Officer also held that the 26-week service requirement under the employer’s scheme (compared with the 13-week service requirement under the Act) was offset by the substantially greater period of paid sick leave available under the employer’s scheme. Overall, the WRC concluded that the duration of paid sick leave, the amount payable, the 26‑week service requirement, and the three‑day waiting period combined to provide a scheme that was, on the whole, more favourable to employees than statutory entitlements.

In the more recent case of Ricard Olechnovic v Keelings Logistics (ADJ-00058887), the WRC again considered the issue of waiting periods under employer sick pay schemes. The employee was on certified sick leave for two shifts but was not paid by his employer as the sick pay scheme included a three-day waiting period before payment. The employer argued that as its sick pay scheme was more favourable than SSP, albeit with a waiting period, there was no obligation to pay for the two shifts claimed by the employee. The Adjudication Officer agreed, noting that the question of waiting days, which is becoming a recurring employee issue before the WRC, was a matter to be raised by worker representative organisations outside of the WRC which had to abide by the Act as drafted.

In James Flynn v Garrett Advancing Motion (ADJ-00044305) and Alan Lehane v Sean Ahern Ltd (ADJ-00051505), the WRC noted that even where the rate of sick pay under the employers’ schemes was lower than the rate of SSP, the employers’ schemes, which provided for 26 weeks and 50 days of sick pay respectively, were, as a whole, more favourable than SSP entitlements.

In Ann Briton v Amcor Flexibles Ltd (ADJ-00050138) and Lee Peate v Musgrave Marketplace (ADJ-00059059), the WRC found that the employers’ schemes were not more favourable to the employees than their SSP entitlements. In both of these cases, the employers argued that they were not obliged to pay SSP as they had their own sick pay schemes which provided a higher rate of sick pay, for a longer period of time than statutory entitlements. However, in both cases, the employers’ schemes imposed a 12-month service requirement before employees were eligible for sick pay and the complainants did not have 12 months’ service. In the Amcor case, the WRC rejected the employer’s argument that future benefits outside of a reference period could be used to conclude that the sick pay scheme was more favourable as a whole than SSP. On appeal, the Labour Court upheld the WRC’s decision that the employee was entitled to SSP as the employer’s scheme was not more favourable as a whole. In the Musgrave case, the Adjudication Officer considered the factors listed at (1) to (5) above and noted that the service requirement warranted more weight than the other four considerations, given its gatekeeping role and the lengthy qualifying period of 12 months. The Adjudication Officer also commented that a shorter qualifying period could be enough to negate the gatekeeping effect of factor (1).

What did the Labour Court decide in the recent SK Biotek Ireland Ltd v Shannon Reina case? 

In SK Biotek Ireland Ltd v Shannon Reina (SLD262), the employer determined that an employee who had been found to be in breach of its Absence Management Policy was ineligible to benefit under its sick pay scheme. The employee claimed that she was entitled to SSP in circumstances where she was not entitled to payment under the employer’s scheme. The employee’s claim was successful before the WRC. The Adjudication Officer held that the employee should receive SSP on the basis that she did not qualify for payment under the company’s scheme during the relevant period.

On appeal, both parties agreed before the Labour Court that the employer’s sick pay scheme provided benefits which, as a whole, were more favourable to the employee than the statutory scheme, so the Labour Court did not consider that issue further. Instead, the central question for the Labour Court was whether the statutory sick leave scheme applied in circumstances where the employee did not meet the eligibility conditions of the employer’s scheme due to the extent of her sickness‑related absences.

The Labour Court held that section 9(1) of the Act is clear and unambiguous – where an employer provides a sick leave scheme that is, as a whole, more favourable, the statutory obligations do not apply at all, even where the scheme is subject to conditions and an employee becomes disentitled to benefit under it. The Labour Court confirmed that the Act provides no exception allowing an employee to receive SSP where they fail to meet the conditions of a more favourable employer scheme. Those conditions are expressly permitted under section 9(3) of the Act, which recognises that an employer’s sick leave scheme may operate “subject to the conditions” of the scheme. As a result, the Labour Court concluded that the employer was not required to pay SSP and it set aside the decision of the WRC Adjudication Officer.

What are the key takeaways for employers? 

Employers operating sick pay schemes that are intended to operate in place of SSP should carefully review their schemes to ensure that, assessed against the factors at points (1) to (5) above, they clearly confer benefits that are as a whole more favourable than SSP. Waiting days will not, of themselves, render an employer’s scheme less favourable, but equally a higher rate of pay or a longer payment period than under statutory entitlements may not suffice, particularly where the scheme imposes a lengthy service requirement. However, the Labour Court's decision in SK Biotek Ireland Ltd v Shannon Reina confirms that where an employer's scheme is more favourable as a whole, section 9(1) of the Act provides an absolute exemption from SSP obligations, even where an individual employee does not meet the conditions for payment under that scheme.