Ireland Update: Company Health Check: Are Your Statutory Sick Pay Provisions Compliant?

Are your sick pay provisions compliant?

The Sick Leave Act 2022 (“The Act”) provided qualifying employees with an entitlement to statutory sick pay (SSP). The level of entitlement is being phased in over a four year period therefore, employers should ensure their employment contracts, policies and employee handbooks are reviewed to ensure compliance with the minimum obligations under the Act. The current entitlement from January 2024 is 5 days SSP. In 2025 it is proposed the entitlement will increase to 7 days payment and 10 days for 2026 so ongoing assessment will be necessary to ensure compliance.

Who is a qualifying employee? 

Employees must have a minimum of 13 weeks’ continuous service before they qualify for SSP. They must provide their employer with a medical certificate from the first day of their absence, signed by a registered medical practitioner to avail of SSP and should receive SSP from the first day of their absence. Many employers already operate an occupational sick pay scheme. Only where any occupational sick pay scheme is, as a whole, more favourable than the SSP scheme will it operate in substitution of the SSP scheme. 

What is meant by ‘as a whole, more favourable’?

The first WRC decision on this point issued in 2023. The case of Katerina Leszczynska v Musgrave Operating Partners provided analysis on whether the company sick pay scheme was, as a whole, more favourable to an employee than the entitlement to SSP. 

The Claimant who had been an employee with the Respondent since 2007 had been absent from work for 4 consecutive days. Due to ‘waiting days’ set out in the company’s sick pay policy, the Claimant was only entitled to payment for the fourth day of her absence. Under the occupational sick pay scheme the Claimant was entitled to 40 days (8 weeks) paid sick leave, however, this was only available from day 4 onwards.  

The Act at that time, provided that qualifying employees were entitled to be paid for a minimum of 3 days SSP (2023) and this was available from the first day of sick leave.

In favour of the Respondent, the Adjudication Officer found the lack of pay for the first 3 days was outweighed by the overall length of the company’s sick pay scheme and that employees would benefit from 8 weeks paid sick leave rather than 3 days as was provided for under the Act. The Adjudication Officer noted the three day waiting period was unpaid but acknowledged that it aligned with the conditions required to receive illness benefit from the Department of Social Protection. The terms of the occupational sick pay scheme were also agreed by way of collective bargaining with trade union representatives. 

However, another recent WRC decision in Ann Britton v Amcor Flexibles Ltd provided clarification  for employers that while their occupational sick pay scheme may be relatively more favourable it can still fall short of being “as a whole” more favourable and therefore will not suffice to substitute for an employee’s entitlement to SSP. 

In the case, the occupational sick pay scheme provided that once an employee had 12 months service they would be entitled to paid sick leave of up to 10 days, once the sick leave was certified. In January 2024 the Claimant was on certified sick leave for 5 days but did not have the 12 month service requirement. The Claimant was informed that she could not avail of SSP as the company scheme was more favourable. 

In reaching a decision the Adjudication Officer compared the company sick pay scheme with the SSP scheme. While noting that the legislation was ‘anything but straightforward’ the Adjudication Officer found in favour of the Claimant. As the SSP scheme provided for a 13 week qualifying period and the company sick pay scheme operated a 1 year qualifying period the Adjudication Officer found that the absence of any payment during the 1 year qualifying period did not confer benefits which were, as a whole, more favourable than the statutory sick leave of five days paid leave (being the 2024 entitlement). 

What are the key takeaways?

Where an employer operates their own sick leave scheme they should obtain legal advice on whether it is likely to be found to be, as a whole, more favourable than the statutory sick pay scheme.

The Act sets out a number of factors to consider in this regard including:

• the period of service 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 that is payable and the reference period of the sick leave scheme  

Where an employer operates the statutory sick pay scheme they should ensure that their employment contracts, handbooks and policies reflect the relevant increases. 

Not only will this ensure compliance and minimise the risk of claims, it will also protect the reputation of the business.

By ByrneWallace, Ireland, a Transatlantic Law International affiliated firm. 

For further information or for any assistance please contact ireland@transatlanticlaw.com.

Disclaimer: Transatlantic Law International Limited is a UK registered limited liability company providing international business and legal solutions through its own resources and the expertise of over 105 affiliated independent law firms in over 95 countries worldwide. This article is for background information only and provided in the context of the applicable law when published and does not constitute legal advice and cannot be relied on as such for any matter. Legal advice may be provided subject to the retention of Transatlantic Law International Limited’s services and its governing terms and conditions of service. Transatlantic Law International Limited, based at 84 Brook Street, London W1K 5EH, United Kingdom, is registered with Companies House, Reg Nr. 361484, with its registered address at 83 Cambridge Street, London SW1V 4PS, United Kingdom.