Employment Spotlight: Statutory Sick Pay – 18 Months Later

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In September 2023, the first WRC decision under the Sick Leave Act 2022 (“2022 Act“) was determined. Over a year on from the introduction of the 2022 Act, we explore this decision and its impact on employers with a private sick pay scheme.

2022 Act Recap

The 2022 Act introduced statutory sick pay (“SSP”) for employees for the first time. The following conditions must be met to avail of this statutory payment:

  • Who does it apply to: All employees, including part-time, full-time, and agency workers.
  • When does it apply: When an employee reaches 13 weeks of continuous service.
  • Rate of pay: 70% of the employee’s normal daily rate, subject to a maximum rate of €110.
  • Entitlement: 5 days in any 12-month rolling period.
  • Proof: A medical certificate in an official language of the state signed by a medical practitioner.
  • When does the entitlement become payable? From the first day of absence.

Private Sick Pay Schemes and the 2022 Act

Sections 8 and 9 of the 2022 Act state that where an employer has an existing private sick pay scheme with terms that are not less favourable than the SSP “as a whole,” the provisions of the 2022 Act do not apply. Simply put, the private scheme applies.

Who determines whether the private scheme is more favourable?

The employer, by carrying out an assessment pursuant to Section 9(2) of the 2022 Act. This section sets out criteria to be assessed, such as length of service, the number of days an employee must be absent before entitlement arises, the number of sick days available, and the level of salary payable.

Case Studies

Leszczynska v Musgrave Operating Partners Ireland ADJ-00044889 – The First Case

The employee was absent due to illness for four consecutive days in 2023. The employer had a private sick pay scheme that took effect after the fourth day of absence and provided for 8 weeks of paid sick leave. Despite this, the employee applied for SSP, which was refused. In response, the employee lodged a claim with the WRC pursuant to the Act.

The WRC conducted a comparison between the two schemes based on the criteria set out in the Act to determine if the private scheme “as a whole” was more favourable. Here’s a summary of the comparison:

Aspect SSP Private Scheme
Requisite service 13 weeks  

6 months

 

When does the entitlement become payable? Day 1 4  day of absence
Entitlement 3 days  

8 weeks

 

Rate of pay  

70% of the employees’ normal daily rate subject to a maximum rate of €110

 

Full salary (less any illness benefit)
Reference period n/a Rolling 12 month period

 

The employer acknowledged that SSP was more favourable in certain aspects, such as the required length of service and the immediate pay from day one. However, overall, the benefits of its private scheme outweighed the SSP. The WRC agreed, noting that the longer duration of paid sick leave and the higher level of sick pay in the employer’s scheme far outweighed the negatives arising from a 3-day waiting period and the requirement of 6 months of continuous service. Thus, the complaint was dismissed.

James Flynn v Garrett Advancing Motion ADJ-00044305 – Considering the Private Scheme in the Context of all Employees, not just the Complainant

This case revolved around a dispute between an employee and their employer regarding the payment of SSP. The employee claimed that they were denied their entitlement to three days of SSP, as mandated by the 2022 Act, for sick leave taken from January 3 to 5, 2023.

The employer argued that their sick leave scheme, established in collaboration with the trade union, provided more favourable benefits than those outlined in the 2022 Act. The scheme granted paid sick leave from the first day of absence for up to 26 weeks in a 12-month rolling period, exceeding the duration of payment stipulated by the Act. Although the scheme required 12 months of continuous service, all employees, including the claimant, met this requirement.

The adjudicator examined the provisions of the Act and compared them with the employer’s private sick pay scheme. While acknowledging the slight disparity in service requirements, the adjudicator noted that it did not disadvantage any employees, as all met the criteria. Thus, having regard to all members of staff, not just the claimant, the adjudicator found that the employer’s scheme offered more favourable benefits overall. Consequently, the complaint was dismissed.

Michael Broderick v North Quay Associates Limited ADJ-00048080 – Awarding Compensation under the 2022 Act

This case revolves around an employer’s failure to provide an employee with their entitled SSP as per the 2022 Act. The employee also claimed that the payments made were inaccurate and that they were penalised for raising concerns about their SSP entitlement.

During the hearing, the employer admitted they had failed to comply with their statutory obligations but rectified the shortfall owed to the employee. The adjudicator acknowledged that the SSP had been fully paid but highlighted the employer’s need to better understand and implement the 2022 Act by establishing a clear policy in the workplace.

Although there was no concrete evidence of the employee being penalised, the adjudicator recognised the employee’s frustration and the effort required to obtain their SSP entitlement. Consequently, the adjudicator awarded the employee compensation of €450 in accordance with Section 14 of the 2022 Act.

Section 14 of the Sick Leave Act 2022 empowers employees to address instances of non-compliance by their employers before the Workplace Relations Commission. If an employee believes their employer has breached the provisions of the 2022 Act, they can file a complaint in line with Part 4 of the Workplace Relations Act 2015 (as amended). In such cases, the adjudication officer operating under section 41 of the 2015 Act may award compensation to be paid by the employer. This compensation, determined to be just and equitable, cannot exceed four weeks’ remuneration for the employee’s employment.

Worker v Service Provider to Financial Services ADJ-00048825 – Disciplining an Employee for a Statutory Sick Leave Absence

This case involved an employer issuing a written warning to an employee for missing 1.5 days due to illness in October 2023. The employee, who had provided a sick cert for the absence and received sick pay, claimed that the warning was in breach of Sections 11(1) and 12(1) of the 2022 Act. Section 11 mandates that an employee absent due to statutory sick leave should be treated as if they had not been absent, while Section 12 prohibits penalising an employee for exercising or proposing to exercise their right to statutory sick leave.

The employee had a history of absences due to illness and had previously received a verbal warning. The employer argued that they were not in breach of the Act, stating that absences negatively impacted the company’s finances. They also contended that disciplining employees for absences was part of the company’s disciplinary policy, which the employee had agreed to through their contract of employment.

The adjudicator found the employer in breach of Section 11, as issuing a written warning for statutory sick leave treated the employee as if they were absent. However, the adjudicator did not find a breach of Section 12, as the warning was issued before the employee claimed the employer was in breach of the Act. The employer was instructed to pay the employee €1,428.75, equivalent to three weeks’ pay, for breaching Section 11.

Employer Spotlight

These decisions provide clear guidance for employers in determining if their private scheme is more favourable than the SSP under the 2022 Act. Key takeaways include:

  • Musgrave Case: Employers should assess their schemes comprehensively to ensure they are more favourable overall compared to SSP.
  • Garrett Case: Benefits provided to all employees are considered, not just the complainant taking the claim.
  • North Quay Case: Employers need clear SSP policies. Compensation can be awarded even if deficiencies are corrected before a claim.
  • Service Provider Case: Employers should exercise caution when disciplining employees for absences covered by statutory sick leave to avoid breaching Section 11 of the 2022 Act.

This article was co-written by Don McGann (Partner), Robin Hyde (Partner) and Stephen Barry (Pre-Trainee)

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