Statutory Sick Pay

The Sick Leave Act 2022 has now been passed and comes into effect from 1 January 2023

The new scheme seeks to align Ireland with other European nations that already have mandatory paid sick leave for workers.

How does mandatory sick pay work?

Employers must compensate employees who are ill and unable to work with statutory sick pay. Employees now have the right to a set amount of paid time off in the event of illness or injury that renders them incapable of working. Under the plan, which will be implemented in four phases, both full-time and part-time employees are eligible to take advantage of paid leave.

From 1 January 2023 employees will be eligible for three days paid sick leave, at a rate equal to 70% of their typical daily wages, up to €110. This increases to five days of paid leave in 2024 before rising once more in 2025 (seven days) and 2026. (10 days). This will be in addition to existing leave entitlements including annual leave, parental and maternity leave, as well as public holidays,. The phased roll-out is planned to spare employers from bearing an undue financial strain and they have more time to prepare and set aside money for the extra expenses.

Points of Consideration for the Employers

• Due to financial constraints, an employer may ask the Labour Court to be excluded from paying mandatory sick pay. The exemption, if granted, would last for a minimum of three months and a maximum of one year.
• Employers have the right to request that the duration of probation, training, or apprenticeship be suspended during periods of statutory sick leave if they believe that the employee’s absence would interfere with the probationary, training, or apprenticeship period while they are on probation, training, or apprenticeship.
• An employee on statutory sick leave ought to be treated just as if they were working. Any employment related rights granted by law, contract, or other means should not be affected by these absences. It’s important to note that an employee shouldn’t face consequences for using their statutory sick leave right.
• An employee may file a complaint with the Workplace Relations Commission (WRC). if an employer disregards the rules. In response, the WRC may provide a decision that is “fair and equitable” considering all the facts. However, according to the proposed legislation, no award may be for more than 20 weeks of pay.
• Each employee’s statutory sick leave will need to be documented by their employer for a period of four years. Failure to do so is a crime punishable by a fine of up to €2,500 upon summary conviction.

Next Steps for Employers

If your employment contract or union agreements already include paid sick leave provisions, you’ll need to assess the agreements considering the new scheme.

According to the Sick Leave Act, if an employment contract already contains a paid sick leave provision that is as favourable as or better than the statutory provision, the employer’s legal obligation is satisfied.

It will be “deemed to be so changed so as to be not less favourable” if the sick leave provision in your regular employment contract is less favourable than the entitlement given by the legislation.

In a nutshell, employers must be abreast of the developments in this field and prepare for compliance with upcoming regulatory requirements, which will necessitate updating employment contracts and procedures. Employers should think about making financial preparations in advance by changing their employment practices to reflect the changes and computing their possible financial exposure based on administrative costs and typical employee absences from recent years.

For additional information and knowledgeable guidance on how your company can ensure complete compliance with the new scheme, get in touch with Emma Richmond, email at emma.richmond@whitneymoore.ie or any member of our Employment Team.