Sick Leave Act 2022 – Time to Prepare
Most recently the Sick Leave Bill 2022, sponsored by the Minister for Enterprise, Trade and Employment, passed all stages of both Houses of the Oireachtas on 13 July 2022 and was signed into law by the President on 20 July 2022.
Note: On 14.09.22 the Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar publicly stated that the Sick Leave Act is to commence on 01.01.23 and so the first year’s paid entitlement of up to three days medically certified sick leave in a year will be applicable from that date. However, we can expect regulations to be published to provide further guidance to employers.
Key Elements to Note
The following are the key elements to note:
Entitlement - The Bill legislates for statutory sick leave (SSL) which is being phased in over 4 years as follows:
2022 – “up to and including 3 Days” (thereafter the number of SSL days can only be increased and shall not be increased by more than 3 days provided for immediately before the making of an order). (Note – In light of the delayed implementation to 01.01.23, this entitlement will now be for applicable in 2023).
2024 – 5 Days proposed*
2025 – 7 Days proposed *
2026 – 10 Days proposed *
(*Note: These are policy objectives and an order can be made by the Minister to specify the overall number of days of statutory sick leave.)
The entitlement applies to those employed on a ‘contract of employment’ (and includes those on a Temporary Agency Work (TAW) contract) and it should be noted that SSL days may be consecutive or non-consecutive days. The first day in a year that an employee is incapable of working due to illness or injury shall be the employee’s first statutory sick leave day, and any subsequent SSL days shall be construed accordingly.
Rate of Payment – The actual rate of payment and any future revisions will be set by regulation. It is intended to be paid at 70% of gross salary for a duration of 3 working days in a calendar year, subject to daily maximum rate of €110.00. This rate may be revised by ministerial order in the future in line with labour costs and earnings changes whilst having regard to factors such as the state of the economy, competitiveness etc. The responsibility for the payment of SSL will rest with the employer.
The legislation does not prevent employers from offering better terms or unions negotiating for more than what the legislation provides through a collective agreement.
Occupational Schemes - The legislation provides that its obligations will not apply where the employer provides his or her employee with a sick pay scheme that confers benefits, over the course of a reference period set out in the scheme, that are more favourable.
Conditions of Entitlement – There are three conditions to be met as follows:
The employee must have worked for their employer for a minimum of 13 weeks continuous service.
Be incapable of working due to “illness” or “injury”.
For all absences under the legislation, the employee must obtain a medical certificate signed by a registered medical practitioner stating that the person is “unable to work” to avail of SSP for each day of absence.
The Government believes it is reasonable that an employee should have worked for an employer for a period in order to qualify for paid SSL and to have established an employee-employer relationship. However, it should be noted that the length of service requirement is linked to the Minimum Notice and Terms of Employment Act 1973 such that an employee will not have to qualify again for sick leave merely because they are regularly laid off, for instance, over the summer period.
Complaints and Record Keeping - An employee can take a complaint to the WRC if they are not provided with SSL. Where compensation is awarded by the WRC or the Labour Court (on appeal) the Bill provides that this shall not exceed 4 weeks remuneration.
Employers must keep proper records for each employee (for four years) and this will 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.
Exemptions - Employers who cannot afford SSL can apply to the Labour Court for an exemption which, if granted, can apply from 3-12 months. However, the Labour Court will look for the existence of an agreement between the employer and their employees consenting to the exemption.
Failing such an agreement, the Court may still grant an exemption if:
the employer has informed employees of its financial difficulties and attempted to reach an agreement, and
that if the employer was compelled to pay SSL the viability of the business would be adversely affected, or likely lead to a material number of employees being laid-off or made redundant.
What Should You Do?
Employers need to prepare!
It remains open to an employer to put a sick pay policy in place and to get ahead of the curve to mitigate any perceived risks for them from the legislation when it comes into force. It should be noted the Act does not preclude an employer including in an employment contract a provision that is more favourable to an employee than the entitlement to S
For those with a sick pay policy, employers should review their current policy to see how it aligns with the terms of SSL and to ensure that the benefits “as a whole” are more favourable. At this point the definition of what may be considered to be more favourable ‘as a whole’ remains unclear and will be a matter initially for each employer to take a view. However, this is likely to be determined by caselaw in time. The focus should in our view at Stratis be on the overall benefits of the occupational scheme for the individual, rather than any single aspect given that the obligations contained in the Act will not apply to an employer who provides employees with a sick leave scheme where the terms provided “as a whole”, are more favourable to the employee than SSL. If a contractual occupational scheme exceeds the minimum entitlements under the Act an employer may wish to review their policy to reference that payment of contractual sick pay is inclusive of their statutory obligations.
For employers covered by collective bargaining (CB) arrangements, they may wish to include consideration of the costs of SSL in the context of discussions with trade unions.
Employers should anticipate:
o the payment of statutory sick leave from day 1 may lead to some increased absence,
o a need to review the accuracy of absence recording and timekeeping data,
o there may be a need to pay more attention to return to work protocols following absence and to introduce return to work interviews where they do not already exist,
o a need to place greater emphasis on policy compliance during induction and probation, and
o to manage attendance generally more actively.
The new Act is to be commenced from 01.01.23.
Brendan McGinty | Managing Partner
‘Strategic Employment Relations’
T: +353 (0) 1 2166302
M: +353 (0) 87 2433038
Disclaimer: The information in this article is for practical guidance only and does not constitute legal or case specific advice. The answers to specific situations will vary depending on the circumstances of each case. This is not a substitute for specific professional advice relevant to individual circumstances facing your business.