The Government needs to introduce legislation if it is to proceed with Minister Joan Burton’s proposals on sick leave, Siptu president Jack O’Connor said today.
Under plans announced this week, the Department of Social Protection would no longer be responsible for the first four weeks of an employee’s sick leave and the onus would fall on employers to cover the payment.
“If it is the case that the Government is to transfer the responsibility for sickness pay to employers for the first month of illness then it must legislate to require employers to pay," Mr O’Connor said.
“This is the practice in several European countries including the UK and the Netherlands. Otherwise, tens of thousands of workers already hard pressed in the extreme will suffer loss of income when they are ill. This would have devastating implications for the families of workers who fall sick,” he said.
“The reality is that employment costs such as this have been subsidised by the social insurance fund for far too long and employers have enjoyed smaller social charges than most developed European countries,” he added.
The plan would make a substantial inroad into the approximately €700 million in cuts Minister for Social Protection Joan Burton has to make in next month’s budget.
The proposal would take at least a year to get up and running but is projected to save the exchequer €150 million in 2013.
Ms Burton argues that the current system under which the State picks up the tab for most employee sickness is an anomaly, and differs sharply from the practice in many other countries.
However, the plan has been strongly opposed by employers’ groups.
Ibec representatives told the Minister her proposal would amount to a tax on employment and ran counter to the Government’s stated policy on job creation.
Irish Small and Medium Enterprises chief executive Mark Fielding said Ms Burton was “living in cloud cuckoo land”. He said the Minister “has no idea of how businesses are struggling on the ground, during the worst recession in modern times”.
Social protection is the Government’s biggest-spending department, paying welfare, pension and benefits to 1.4 million people each month and with an annual budget of €21 billion. The bulk of its spending is on welfare. As the Government has committed itself not to cut the rates of primary social welfare payments, it will have to find alternative savings within the department.