There is currently no legal obligation on employers to provide sick pay to employees, except where their contract of employment allows it as part of their terms of employment. Some employers may exercise their discretion to pay employees during sick leave for a specific duration and or reason. Employees are entitled to apply for illness benefit from the Social Welfare which is currently paid at a rate €203 per week before tax for full-time PAYE workers. This 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.
Introducing provisions for sick leave
The Sick Leave and Parental Leave (Covid-19) Bill 2020 is a Private Members Bill proposed by the Labour Party. That seeks to require employers to pay 6 weeks of sick leave, and to lengthen the provisions of force majeure leave.
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. Although its intentions were for Covid-19 related illnesses; if introduced, it would cover sick leave of any nature, and be paid at the same rate as annual leave.
The implications of this proposal are not only that the employers would be obliged to pay an employee on sick leave for an extensive period of leave, but also the cost of replacement, with little or no notice. Employers are already faced with managing a reduced workforce due to Covid-19 restrictions to indoor capacity and social distancing, and this bill will only exacerbate an already difficult situation for employers.
Extending the provisions of Force Majeure leave
The Bill proposes to extend the right to receive paid force majeure leave for circumstances relating to Covid-19 such as the closure of a school or pre-school or where the child is unable to attend. Force Majeure is paid leave when the immediate presence of an employee is indispensable, at the place where the ill/injured person is limited. Currently, force majeure entitles an employee to avail of a maximum of three days in 12 consecutive months or five days in 36 consecutive months. This paid leave is proposed to be 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. While Force Majeure has always been an entitlement, this extension will result in a potentially significant increase to employee costs from their absence and their replacement.
Furthermore, legislative measures such as Parental leave has already been extended to 26 weeks as of 1 September 2020, which would allow parents take care of their children should they be sent home from school.
In response to the Bill’s proposals, the Government has deferred the Bill for 6 months. During his time the Government will engage with Unions and employers to consider reforms and improvements to Ireland’s statutory sick pay law and any related change to illness benefit which is funded through PRSI contributions.
This Bill is of grave concern to the SFA as we are aware of the financial burden such changes would place on small business owners. Over the coming months, we will engage with Government, the opposition and members on these proposals and continue to update you on the Bill’s progress.