Ireland - Proposed new rights to sick pay and parental leave pay in Ireland

Background

Currently employees have no legal right to sick pay in Ireland. Some employers may decide to pay their employees during sick leave but if they do, the duration and level of pay is at the discretion of the employer. Employees are entitled to apply for illness benefit from the government which is currently paid at a rate €203 per week before tax for full-time PAYE workers. Illness benefit is only paid from the seventh day of illness and employees must have at least two years of PRSI contributions to be entitled to the payment. Until 31 March 2021, workers certified as diagnosed with or suspected of having Covid-19 are entitled to apply for enhanced illness benefit of €350 per week. The rules which apply to the Covid-19 enhanced illness benefit are different than those which apply to normal illness benefit. Enhanced illness benefit is payable from the date the employee is certified as diagnosed with or suspected of having Covid-19.

Employees are also entitled to paid force majeure leave where for urgent family reasons, the immediate presence of the employee is indispensable owing to an injury or illness of a close family member. The maximum amount of leave is three days in any 12 month period or five days in a 36 month period

The Labour Party point out that Ireland is “an outlier in Europe” as almost all European countries require employers to pay some level of sick pay to their employees by law, and that the absence of sick pay has been highlighted by NPHET and the acting Chief Medical Officer as “a problem in controlling outbreaks” of Covid-19. In particular, recent outbreaks in a number of meat plants has shed light on the potential impact of employees having no legal right to sick pay on the spread of Covid-19. Labour Party leader Alan Kelly, who sponsored the Bill, said: “The current rules on sick pay and illness benefit act as a disincentive for workers to comply with public health guidelines as they may be left with reduced or no income. This Bill would create a level playing field.”

What are the proposals?

Sick pay

The Sick Leave and Parental Leave (Covid-19) Bill 2020 (the “Bill”) provides that after four weeks’ service, an employee will be entitled to sick pay for a continuous period of six weeks, or 30 days in total in any period of 12 months, for any day(s) that he or she is incapable of working as a result of illness or injury. Sick pay will be paid at the same rate as annual leave. There is no waiting period set out in the Bill, so employees would be entitled to sick pay from the first day of illness or injury. It will not be possible to contract out of the above entitlements (other than by way of collective agreement or registered employment agreement).

Three to six weeks is the average recovery time for moderate to severe cases of Covid-19, according to WHO, and this coincides with the proposed duration of sick pay provided for in the Bill. After sick pay entitlement is exhausted, the employee will move on to illness benefit. Alan Kelly has indicated that under the new proposals, employers will be entitled to receive any illness benefit due to the employee while they are in receipt of sick pay. However, it is unclear whether the government or the employee will reimburse the employer for illness benefit due. Where employers (voluntarily) pay employees who are on sick leave, they will normally include a provision in the contract which provides that employees will refund the employer any illness benefit they have received.

Any complaints about an employee’s entitlement to paid sick leave can be brought to the WRC in the same way as a complaint regarding an employee’s entitlement to paid annual leave.

Extension to force majeure leave

The Bill also proposes to extend the right to receive paid force majeure leave to circumstances where, as a result of Covid-19 measures introduced by the government, a school or pre-school service is closed or a child cannot attend their school or pre-school service. In these circumstances, paid leave is available for an employee whose child is impacted for as long as the child is unable to attend the school or pre-school service and the employee is required at his or her home in order to care for that child.

What next?

The Bill is currently at Second Stage before the Dail. Employers and unions are to be consulted on the proposals set out in the Bill and the government has indicated that it will take at least six months to examine the impacts and cost such a measure would have on small and medium businesses. This has been criticised by Mr Kelly who said “the scheme is needed now, not in six months”.

Some private sector employers already provide for some level of contractual sick pay in their sick leave policies, but for those that don’t, this Bill, if passed will result in a potentially significant increase to employee costs.

While it is too early to tell what the final scheme will look like, it seems likely that employers will be legally obliged to pay their employees during sick leave in the not too distant future.

You can read the draft Bill here.