Sick Leave and Parental Leave Bill is “A Charter for Absence”
In September 2020, the Labour Party introduced its Sick Leave and Parental Leave (Covid-19) Bill 2020 by the Labour Party to provide a legal entitlement to paid time off from work for workers when they are ill.
Having reviewed the Bill, Stratis is of the view that as drafted it is a ‘Charter for Absence’ and is being advanced as a populist measure, without any regard for its impact on absence levels, on employment, the cost of employment or the capacity of an employer, including SME’s to fund such payments. Stratis is concerned that the Bill is a forerunner to encouraging a permanent move to statutory sick pay, given that it does not contain any ‘sunset’ provision that it shall cease to have effect after a period or when we ultimately emerge from Covid-19.
Whilst the Bill may be well intentioned to address the needs of workers during the Covid-19 pandemic, it is unworkable and will only serve to impose additional and unsustainable burdens on employers at a time of peak uncertainty, when for many their very survival is at stake due to Covid-19 and the anticipated effects of Brexit, which still have to be navigated.
Consideration of increasing employers’ cost in relation to a system of statutory sick pay will lead to employers reducing employment costs in other ways, as they are not in a position to absorb these costs on employment or to increase prices of goods or services provided. Employers in Ireland, because of Covid-19, are already being forced to use a range of cost cutting mechanisms to reduce payroll costs.
As part of any debate on the merits of ‘statutory sick pay’, the priority for integrated structures and support for those out of work due to illness to get back to work needs careful consideration, along with an examination of how the level and costs of absenteeism can be reduced. These issues are central considerations when striking the right balance about the role of the social insurance fund, contribution and taxation rates and benefits payable along with the impact on employment costs.
On 16.11.20, the Department of Enterprise, Trade and Employment launched a public consultation process, inviting views by 18.12.20, on how such a possible statutory sick pay framework would work. The Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar is committed to introducing a statutory sick pay scheme that works for employees and employers as quickly as possible.
It may be that the Government’s consultation process will be more successful in framing the key issues and in striking the right balance, however, Irish business remains highly sensitive to increases in employment costs. We need to help employers to reduce these costs, so that through the economic recovery to come they can sustain and create jobs so that we can hasten the return to much needed investment and growth.
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