On March 30th, The Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar, received government approval for new laws to give all workers the right to paid sick leave for the first time in Ireland.
The Sick Leave Bill 2022 (the “Bill”) will legislate for a statutory sick pay scheme for all employees and will be phased in over a four-year period. Ireland is one of the few advanced economies in Europe that does not currently provide statutory sick pay. The new laws proposed in the Bill will bring Ireland in-line with other European countries that guarantee mandatory paid sick leave for workers, according to the Tánaiste.
Covid-19 uncovers disparity within the workforce
During the pandemic, a lack of sick pay in sectors such as food processing led to workers attending work despite testing positive for Covid-19, as they could not afford to stay at home. The Tánaiste noted: “The pandemic exposed the precarious position of many people, especially in the private sector and in low-paid roles, when it comes to missing work through illness,” and emphasised the need for change. No one should feel pressured to come to work when they are ill because they can’t afford to’’.
Four year phased rollout
As we reported in June 2021, the Bill will be phased in over four years. Once enacted, workers will initially be covered for three days of sick pay. This will rise to 5 days in 2024, 7 days in 2025 and 10 days in 2026. Sick pay will be paid at a rate of 70% of the employee’s wage up to a maximum of €110. This rate was arrived at following an analysis of average incomes in 2017 and can be amended by ministerial order in the future. Employers are welcome to provide more favourable conditions for sick pay but are obligated to provide at least the statutory minimum prescribed in the act.
Stipulations for employees to avail of the scheme
To avail of the scheme, employees must obtain a medical certificate from a doctor and must have worked for the employer for a minimum of 13 weeks. Sick pay will be paid by the employer, not the state. The rate of 70% up to €110 is therefore set to ensure the employer is not burdened with excessive costs, particularly in sectors where they must also deal with the cost of replacing a sick employee. Once the entitlement of sick pay ends, the employee may qualify for illness benefit from the Department of Social Protection, subject to Pay Related Social Insurance (PRSI) contributions.
The primary intention of the Bill is to provide a minimum level of protection to low-paid employees who have no entitlement to sick pay. The phased approach to the bill looks to strike a balance between protecting those who would otherwise have no choice but to attend work regardless of illness, and the financial interests of businesses who are dealing with constantly increasing costs, as well as the disruption of the pandemic and Brexit.
Employers must prepare
The scheme will bring with it new obligations for employers. It will impose costs on companies who do not already have a sick pay scheme in place. Employers must therefore keep proper records for each employee which must be maintained for a period of four years and include information in relation to each employee who availed of sick leave. An employer who fails to maintain accurate records may be convicted and subject to a fine of up to €2,500.
Once enacted, the Bill is due to come into force in September 2022, so now is a good time for employers and HR professionals to review existing contracts, policies and ensure future budgeting accounts for the added expense.
About the author: Hugh Le Gear is a Solicitor on the Employment Team