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On June 9th the Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar, TD, announced details of the proposed new legislation to provide all workers with the right to paid sick leave.
Unlike many other European countries, in Ireland there is currently no statutory right to be paid by your employer while you are on sick leave from work. From 2022 this is due to change with the approval by government for the drafting of the General Scheme of the Sick Leave Bill 2021 (“the Scheme”).
What does this scheme mean for employers?
The Scheme is due to be phased in over a four-year period. The sick leave days to be paid by employers will start at three days in 2022, ultimately increasing to 10 days by 2025. The Government stated that the phasing of the scheme and the number of days to be covered takes into account the cost to employers and will allow them time to prepare for the expense of the scheme.
Under the provisions of the Scheme, sick pay will be paid by employers at a rate of 70% of an employee’s wage subject to a threshold of €110. This threshold can be revised over time by ministerial order in line with inflation and changing incomes. The Bill implements this 70% threshold so as not to overly burden employers who, in some sectors and circumstances, would have to replace sick staff on short notice in addition to paying sick pay.
The aim of the Scheme is to provide a minimum level of protection to employees without entitlement to company sick pay scheme. It is envisaged that the legislation will specify that employers may offer better sick pay terms to employees’ terms than in the legislation and that Trade unions may organise collective agreements more favourable to their members.
There will be a recourse for workers to take a complaint under the new scheme to the Workplace relations Commission where they are not provided with a company sick pay scheme. To be entitled to the provisions, an individual must be working for their employer for at least 6 months. Employees will also need to be certified by a GP as unfit to work.
This is a major change for any employers that do not already operate a sick pay scheme. It will result in an additional burden placed on employers as the Government has stated that there will be no scheme to assist with the costs. Employers should prepare to review their contract and sick leave policies once the legislation comes into place. In advance of the legislation employers can start getting the mechanisms in place for seeking sick certificates from employees once they are out for more than 3 days and review the sick leave taken by employees for the past few years so that they can make provisions for the implementation of the scheme.
Employers should also keep abreast of the draft legislation to introduce the changes. This legislation is expected by the end of 2021. Speaking about the Scheme the Tánaiste noted that: “We are only now getting back on our feet and are not yet out of woods. By phasing this in over a four-year period, we are taking a balanced approach to plug a well acknowledged gap in our social protections while also responding to the cost concerns of small businesses in the current economic environment”.
About the author: Emer Murphy, Senior Associate on the Employment Team.