Summary
Under the Sick Leave Act 2022 (the ‘Act’) (and related orders), employees are currently entitled to five days of paid sick leave per calendar year. Statutory Sick Pay (‘SSP’) is paid by employers at 70% of an employee’s normal pay, up to a maximum of €110 per day. To qualify, employees must have at least 13 weeks continuous service.
Unlike many company sick pay schemes (‘CSP’), SSP applies from the first day of illness, provided the employee submits a medical certificate from day one. While there is no obligation on employers to provide sick pay beyond SSP, many employers provide enhanced company schemes to stay competitive in the employment market. If the company scheme is, as a whole, more favourable to employees than SSP, employers may be exempt from the Act under Section 9 (1). In determining whether the company scheme is more favourable, Section 9 (2) lists the following factors to be considered:
- The period of service of the employee that is required before sick leave is payable
- The number of days that an employee is absent before sick leave is payable
- The period for which sick leave is payable
- The amount of sick leave payable, and
- The reference period of the sick leave scheme
Background
Karolina Leszczynska v Musgrave Operating Partners Ireland (ADJ-00044889) was the first WRC decision under the Sick Leave Act 2022. The Complainant argued that her employer’s CSP breached the Act as although it provided for eight weeks paid sick leave, the first three days of absence were unpaid “waiting days”. The Respondent, relying on sections 8 and 9 of the Act, argued that the CSP was as a whole more favourable than SSP, and claimed the exemption under Section 9. The WRC agreed, noting that the longer paid leave period combined with the 100% wage payment (in contrast to the SSP ceiling), outweighed the disadvantage of the three-day waiting period. This case has since been cited in several WRC decisions (e.g. James Flynn v Garrett Advancing Motion (ADJ-00044305); Alan Lehane v Sean Ahern Ltd (ADJ-00051505)).
However, in Lee Peate v Musgrave Marketplace (ADJ-00059059), the employer’s CSP had a 12-month waiting period before employees qualified for the full entitlement, however employees were paid for the first two instances of up to two days’ uncertified sick leave in the interim. Similarly to the Karolina Leszczynska case, the Respondent relied on sections 8 and 9 of the Act, arguing that the terms of the CSP, taken as a whole, were more favourable than SSP and were therefore exempt under section 9. However, the Adjudication Officer held that the CSP was not more favourable overall, primarily due to the 12-month waiting period. Interestingly, the Adjudication Officer suggested that the first factor in Section 9 (2), i.e. the required length of service of an employee before entitlement to the CSP, should carry the most weight and acts as a “gateway to the rest”, even though there are no weighting criteria set out in the legislation.
Key Takeaways
Recent WRC decisions show increasing scrutiny of CSPs that include waiting periods or long service requirements. While Leszczynska accepted a CSP with waiting days as more favourable as a whole, Peate signals that lengthy waiting periods and limited interim pay may undermine the Section 9 exemption.
Employers may wish to review their CSP terms, particularly to ensure that entitlements are clearly outlined in contracts, and to potentially consider providing for up to five days of CSP in any waiting period to mitigate the risk of a claim under the Act.
If you have any queries in relation to the above, please reach out to your usual Littler contact.
