Businesses that cannot afford sick pay for staff should be exempted from the obligation to pay it, an Oireachtas committee is set to recommend.
However, if a business is successful in demonstrating to the Labour Court that it cannot make the payment, employees would be compensated by the State's Social Insurance Fund, the Oireachtas Committee on Enterprise,Trade and Employment will find this week.
The report is set to be published on Wednesday, but a draft copy of its findings seen by The Irish Times outlines how it will recommend an exemption based on a similar provision in the National Minimum Wage Act.
During its pre-legislative hearings on the outline of the new legislation, the committee was warned it could impose a significant cost on employers, particularly smaller and medium-sized firms that have been hit hard by the Covid-19 pandemic.
Additional costs
Employers’ group Ibec told the committee during the hearings that firms will face additional costs involved in the replacement of skills, and that many will in practice have to operate the new statutory system alongside an existing occupational scheme.
The Government’s plan envisaged giving all employees a minimum level of financial compensation if they cannot work. It is particularly targeted at those in low-paid roles who currently receive no sick pay or are not entitled to illness benefit. The legislation is intended to act as a “floor” to the benefits, with more generous sick pay schemes envisaged to remain in place.
The coalition plans to introduce it over a four-year period, starting with three days per year in 2022, rising to five days in 2023 and seven days in 2024. The following year, in the final phased move, employers will pay 10 days per year. The rate will be paid by employers at 70 per cent of an employee’s wage, subject to a daily maximum of €110.
Medical certificate
The committee has also recommended that employees be able to avoid the cost of obtaining a medical certificate to qualify for sick pay, which is a precondition of the payment being made. The report found that some means to rebate the cost of such certification should be made, in order to ease the financial burden on workers – particularly those on low pay.
The recommendations include that there should be a minimum rate of sick pay, which members argued would address the particular needs of low-paid workers.
The report also contains moves to tackle a potential practice whereby “unscrupulous” employers could put workers on a series of three-month contracts, each one terminating before the obligation to pay sick pay kicks in. It recommends that all employees be entitled to sick pay, regardless of their length of employment.
