Sick Leave Bill 2021

On 9 June 2021, the Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar TD, announced details of a new law to give all workers the right to paid sick leave. The announcement was of a scheme, to be phased in over the next four years, which would provide for up to ten days of paid sick leave per year by 2025.

Most recently, on the 5^th November last, the Government has published further details with the publication of the highly anticipated Sick Leave Bill 2021 (“the Bill"), with pre-legislative scrutiny of the Bill to commence this week.

The Bill introduces for the first time a right to sick pay which will be legally enforceable through the Workplace Relations Commission and the Courts. This legislation is viewed as a progressive measure for both employers and employees that will bring Ireland in line with many other wealthy OECD countries. However, many employers are obviously concerned about the cost to business of this new law.

Currently, Ireland is one of the few advanced countries in the European Union that does not have any legislation providing mandatory sick pay. While many large companies in Ireland already have sick pay schemes in place for their employees, many employees in low paid jobs are without paid sick leave.

This divide was particularly highlighted during the Covid-19 pandemic when many of the low-paying essential workers were forced out of financial necessity to continue going to work while feeling unwell as they had no paid sick leave. Labour’s spokesperson on Employment Affairs, Senator Marie Sherlock, described the lack of paid sick leave as “a fundamental weakness in our fight against the pandemic”. Therefore, in June 2021, the Irish government's Summer Legislative Programme 2021 prioritised the introduction of a statutory sick pay scheme for Ireland.

Employees’ Entitlements and Eligibility

The Bill as currently drafted provides for “statutory sick leave”, which is defined as the entitlement of an employee to be paid statutory sick leave payment by his or her employer in respect of a statutory sick leave day”. The Bill applies to employees (those working under a contract of service) who have completed 13 weeks continuous service and the entitlement as set out in the Bill is to 3 statutory sick leave days per annum, with the provision for the Minister to vary the number of statutory sick leave days to such number of days as he or she considers appropriate having regard to:

(a) the state of the economy generally, the business environment and national

competitiveness;

(b) the potential impact, including the potential for any disproportionate or other

adverse impact that the making of an order will have on the economy generally, specific sectors of the economy, employers or employees;

(c) annual and quarterly data on earnings and labour costs as published by the

Central Statistics Office;

(d) expert opinion, research, national or international reports relating to the matters specified at paragraphs (a) to (c) that the Ministers considers relevant;

(e) such other matters as the Minister considers relevant.

The Bill also provides that the first Order made by the Minister cannot reduce the number of statutory sick leave days and the Bill also provides that an Order of the Minister can never reduce the number of statutory sick leave days below 3 days nor can the Minister increase the number of statutory sick leave days per annum by more than 3 days. The first Order made by the Minister cannot be made before the expiration of 12 months after the commencement of the entitlement to statutory sick leave and subsequent Orders must be at least 12 months apart. This at least provides for some certainty for employers for a full year after the entitlement is introduced, and also on each occasion that the entitlement is increased.

Statutory sick leave days can be consecutive or non-consecutive and employees must provide the employer with a medical certificate signed by a registered medical practitioner stating

that the employee named in the certificate is unable to work.

Payment for Statutory Sick Leave

In terms of calculating the payment, the Bill provides for a daily rate of payment in respect of each statutory sick day (referred to as the “statutory sick leave payment”). The Minister can make Regulations for the purposes of prescribing the statutory sick leave payment, which may;

(a) specify the percentage rate of an employee’s pay, up to a maximum daily amount,

at which statutory sick leave payment will be paid,

(b) subject to the maximum daily amount specified in accordance with paragraph

(a), specify an allowance in respect of board and lodgings, board only or lodgings only in a case in which such board or lodgings constitute part of the employee’s remuneration calculated at the prescribed rate, or

(c) subject to the maximum daily amount specified in accordance with paragraph

(a), specify basic pay and any pay in excess of basic pay in respect of shift work, piece work, overtime, unsocial hours worked or hours worked on a Sunday, allowances, emoluments, premium pay (or its equivalent), or any other payment as the Minister considers appropriate, that are to be taken in to account in the calculation of statutory sick leave payment.

Interplay with Contracts of Employment

The Bill provides that nothing in the Act (once eventually enacted) shall prevent the inclusion in a contract of employment of a provision that is—

(a) as favourable to an employee as, or

(b) more favourable to an employee than, an entitlement to statutory sick leave in accordance with this Act, and any such provision shall be in substitution for, and not in addition to, that entitlement.

Equally, the Bill provides that a provision in a contract of employment that is less favourable than the entitlement provides for under the legislation will be deemed to be modified so as not to be less favourable. Therefore, the statutory sick leave entitlement is the least an employer can give to employees once the legislation is enacted.

Non-application of obligations under Act

The Bill also provides that the obligations under the legislation shall not apply to an employer who provides his or her employees 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 statutory sick leave.

In that regard, to determine whether a sick leave scheme confers benefits that are, as a whole, more favourable than statutory sick leave, the following matters shall be taken into consideration:

(a) the period of service of an employee that is required before sick leave is payable;

(b) the number of days that an employee is absent before sick leave is payable;

(c) the period for which sick leave is payable;

(d) the amount of sick leave that is payable;

(e) the reference period of the sick leave scheme.

A “sick leave scheme” is in turn defined as follows –

“sick leave scheme” means a scheme that provides for the payment of remuneration that an employee will be entitled to receive during a period of illness or injury according to the circumstances and subject to the conditions of the scheme under—

(a) a contract of employment,

(b) an enactment,

(c) a collective agreement negotiated with a recognised trade union or staff

association, or

(d) any individual or other group arrangement.

Exemption from obligation to pay statutory sick leave payment

The Bill provides that the Labour Court may, on application to it by an employer or an employer’s representative, exempt an employer from the obligation to pay an employee or number of employees statutory sick leave payment otherwise payable to them under the legislation. Such an exemption cannot exceed one year, and cannot be for less than 3 months. The application for an exemption will result in a hearing by the Labour Court, followed by a written decision of the Court.

The Bill goes on to provide that the Labour Court shall not grant an exemption under

subsection (1) unless it is satisfied that—

(a) where the employer makes an application for an exemption, and that employer

employs more than one employee, he or she has entered into an agreement with—

(i) the majority of the employees,

(ii) the representative of the majority of the employees, or

(iii) a trade union representing the majority of the employees,

in respect of whom the exemption is sought, whereby the employees, the representative of the employees or the trade union, consents to the employer making the application, and to abide by any decision on the application that the Court may make, and

(b) the employer’s business is experiencing severe financial difficulties.

Where the Labour Court is not satisfied that the majority of the employees or their representative consents to an application under paragraph (a) of that subsection, the Labour Court may grant an exemption under subsection (1), provided the Labour Court is satisfied that—

(a) the employer has informed the employees concerned of the financial difficulties

of the business and has attempted to come to an agreement with the employees, their representative or trade union in relation to a proposed exemption from payment of statutory sick leave payment, and

(b) the employer is unable to pay statutory sick leave payment to the employees,

due to the employer not having the ability to pay or being unlikely to be able to pay, to the extent that, if the employer were compelled to pay there would be a substantial risk—

(i) having regard to the number of employees employed by the employer, that a

material number of those employees would be likely to be laid-off

employment with the employer, or made redundant, or

(ii) that the sustainability of the employer’s business would be significantly

adversely affected.

There is appeal from the Labour Court to the High Court on a point of law.

Protection of Employment Rights

The Bill provides that an employee shall, during a period of absence from work by the employee while on statutory sick leave, be treated as if he or she had not been so absent and such absence shall not affect any right related to the employee’s employment whether conferred by statute, contract or otherwise. Furthermore, the Bill states that absence from employment while on statutory sick leave shall not be treated as part of any other leave from employment (including annual leave, maternity leave, additional maternity leave, leave under section 16(1) and (4) of the Maternity Protection Act 1994, adoptive leave within the meaning of the Adoptive Leave Act 1995, additional adoptive leave within the meaning of the Adoptive Leave Act 1995, paternity leave, transferred paternity leave and parent’s leave) to which the employee concerned is entitled.

Employees on Probation

The Bill very helpfully provides that where an employee is on probation or is undergoing training in relation to that employment or is employed under a contract of apprenticeship takes statutory sick leave, and his or her employer considers that the employee’s absence from employment while on statutory sick leave would not be consistent with the continuance of the probation, training or apprenticeship, the employer may require that the probation, training or apprenticeship be suspended during the period of statutory sick leave and be completed by the employee at the end of that period.

Penalisation

Like many other pieces of employment legislation, the Bill provides that an employer shall not penalise or threaten penalisation of an employee for proposing to exercise or having exercised his or her entitlement to statutory sick leave. The concept of penalisation in that regard is defined as in other employment legislation as follows;

(a) suspension, lay-off or dismissal (including a dismissal within the meaning of the Unfair Dismissals Acts 1977 to 2015), or the threat of suspension, lay-off or dismissal,

(b) demotion or loss of opportunity for promotion,

(c) transfer of duties, change of location of place of work, reduction in wages or change in working hours,

(d) imposition or the administering of any discipline, reprimand or other penalty (including a financial penalty), and

(e) coercion or intimidation.

Employer Records

The Bill provides that employers must make a record of the statutory sick leave taken by each employee, and such records must include the following detail and must be maintained by the employer for a period of four years (and failure to do so without reasonable cause is an offence under the legislation);

(a) the period of employment of each employee who availed of statutory sick leave,

(b) the dates and times of statutory sick leave in respect of each employee who

availed of such leave,

(c) the rate of statutory sick leave payment in relation to each employee who availed

of statutory sick leave.

Enforcement and Liability for Employers

The Bill provides that, where an employee believes that his or her employer has failed to comply with the provisions of the legislation in relation to statutory sick pay, the employee can make a complaint to the Workplace Relations Commission (“the WRC”). A decision of the WRC under the legislation may include an award of compensation (in favour of the employee concerned to be paid by the employer concerned) of such amount, as the Adjudication Officer considers just and equitable having regard to all the circumstances but shall not exceed 20 weeks’ remuneration in respect of the employee’s employment.

An appeal from the WRC lies as usual to the Labour Court and again the Labour Court can award compensation not exceeding 20 weeks remuneration.

Claims must be referred to the WRC within six months of the occurrence of a dispute relating to the entitlement of an employee under the legislation.

Conclusion

The bill as drafted has now commenced its journey through the legislative process and so will have to wait and see what amendments are introduced by the Dáil and Seanad.

Employers who currently have no provision for sick pay will be watching very closely as this legislation progresses.