Sick pay in Ireland: Will sick pay be on the Horizon?

Current position

At present, no entitlement to sick pay exists in Irish law. There is no statutory obligation on employers to operate a sick pay scheme.

In comparison with our EU counterparts, Ireland’s minority position with the absence of legislation to account for statutory sick pay has come into sharp focus during the Covid-19 pandemic.

Many employees feel obliged to attend work while unwell. This has highlighted potential issues where some workers who cannot afford to quarantine may continue to work.

While there is no statutory obligation on employers to pay sick pay, many employers choose to do so on a discretionary basis. The rate and duration of same may vary significantly from days to months between organisations. Employers usually seek to “top-up” the State paid Illness Benefit.

Employers who extend company sick pay to employees must ensure that is operated fairly and is not in breach of Employment Equality Acts 1998-2015. The recent WRC decision User Interface Designer v Engineering Company reaffirms that employers should always ensure that discretionary benefits are reasonably and fairly applied to employees who are absent due to illness from work.

So, what statutory supports are available to employees who are absent from work due to illness?

Illness Benefit

Employees who are unable to work due to injury or illness are entitled to receive the State paid Illness Benefit after six consecutive days of absence (reduced to three days by February 2021) if they have paid sufficient PRSI contributions and are under pensionable age. Payments are calculated based on an employee’s average weekly earnings in the relevant tax year.

The Covid-19 Enhanced Illness Benefit

The Covid-19 Enhanced Illness Benefit was introduced in response to the current pandemic. Its purpose was to support employees and the self-employed who are diagnosed with Covid-19 and are required to restrict their movements or self-isolate.

Are there restrictions on this benefit?

Yes. Certain criteria apply;

The employee must, on the instruction of a doctor or the HSE, be confined to their home or a medical facility.
The employee must obtain the necessary documentation from their employer or the HSE, such as a Certificate of Incapacity for Work.
The employee must have made sufficient social insurance contributions.
The employee must have a contract of employment.

It is expected that this benefit will remain available for those affected until March 2021, at a rate of €350 per week.

Catalyst for change: Sick Leave and Parental Leave (COVID-19) Bill 2020

The Covid-19 pandemic has strengthened calls for a statutory sick pay scheme in Ireland. The NPHET have strongly criticised the lack of such a scheme due to its possible impact on the spread of the Covid-19 virus. In response to these calls, the Sick Leave and Parental Leave (COVID-19) Bill 2020 was put forward by the Labour Party in September 2020.

This bill proposed that following four weeks of service, from the first day of illness, employees would be entitled to 30 days of paid sick leave at the employee’s normal weekly rate for a continuous period of 6 weeks, or up to 30 days in any 12-month period.

Following this, the Oireachtas Special Committee on COVID-19 Response published a report which called for statutory sick pay to be rolled out to protect low-paid workers in high-risk industries, such as meat processing.

Public Consultation Process

On 11 November 2020, the Department of Enterprise, Trade and Employment launched a public consultation process on the introduction of a statutory right to paid sick leave for all employees with a view to bringing Ireland in line with our European counterparts.

Looking ahead

The Government has committed to enacting a statutory sick pay scheme by the end of 2021. This move will compliment the enhancement and increase of other social protections for workers including;

Parental leave benefit;
Enhanced maternity benefits;
Paternity benefits; and
Increased parental leave.

Key considerations for employers

For employers who do not offer sick pay to employees, the mandatory introduction of sick pay is likely to result in significant costs. For employers who do currently offer sick pay, the possible introduction of mandatory sick pay may require them to increase the current entitlements offered next year. Employers should remain cognisant of any forthcoming developments and should prepare to review their employment handbooks and contracts of employment to comply with new legislation.

While due care has been taken in drafting this article, it should not be construed as legal advice. Should you require additional information or assistance, please contact Elaine O’Flynn, or one of team listed below:

Shane Crossan

Managing Partner

scr@ofx.ie

Mícheál O’ Mullain

Partner

mom@ofx.ie

Judith Curtin

Partner

jc@ofx.ie

Sarah Coughlan

Senior Associate

sco@ofx.ie