20/09/2022

This month our focus is on the new Sick Leave Bill 2021 that was published on 5 November 2021.

The Bill sets out the proposed legal framework through which Statutory Sick Pay will be introduced in Ireland.

Sick Leave Bill 2021

Employees in Ireland currently have no statutory entitlement to pay whilst absent from work due to sickness.

If a person is unable to work because of sickness or injury, they can apply for Illness Benefit from the Department of Social Protection provided they are aged under 66 and have enough PRSI contributions.

Illness Benefit is paid at four different rates based on the individual’s average weekly earnings in the relevant tax year and is paid for a maximum of:

• 2 years (624 payment days) provided the individual has at least 260 weeks of social insurance contributions paid since they first started work

or

• 1 year (312 payment days) if the individual has between 104 and 259 weeks of social insurance contributions paid since they first started work

Since 1 March 2021, the number of waiting days has been reduced from 6 days to 3 days. Waiting days do not apply where the individual has been diagnosed with Covid-19 or is medically required to self-isolate.

On 9 June 2021 the government announced details of a new law to give all workers the right to paid sick leave. This new statutory sick pay scheme will be phased in over a four-year period with a proposal that employers will eventually cover the cost of 10 sick days per year in 2025.

The Bill introduces for the first time a right to sick pay which will be legally enforceable through the Workplace Relations Commission and the Courts. Any complaint to the WRC must be made within 6 months of the occurrence of the dispute and the WRC can make an award of compensation of up to 20 weeks’ pay.

Eligibility

The current draft of the Bill provides for “statutory sick leave” and, in its current form will apply to employees who have completed 13 weeks continuous service (a minimum, service requirement of 6 months had initially been proposed when the scheme was announced in June.)

Employees must also provide the employer with a medical certificate signed by a registered medical practitioner stating they are unable to work.

Entitlement

The entitlement, as set out in the Bill, is to 3 statutory sick leave days per year. The Minister can vary the number of statutory sick leave days subject to:

• the number of days can never be reduced below 3;
• the number of days cannot be increased by more than 3 in each year; and
• changes must be 12 months apart.

The plan is that over the next 4 years statutory entitlement to sick pay will increase as follows:

• 2022 – 3 days covered
• 2023 – 5 days covered
• 2024 – 7 days covered
• 2025 – 10 days covered

Amount of Statutory Sick Pay

Sick pay will be paid by employers at a rate of 70% of an employee’s wage, subject to a daily threshold of €110. By comparison the Statutory Sick Pay Scheme in Northern Ireland pays £95.85 per week but for a much longer period (up to 28 weeks.)

The % approach is in line with the calculation method used in most of the EU Member States that have statutory sick pay schemes, where the percentage used varies from 25% to 100% of the employee’s gross wage.

Once entitlement to sick pay from the employer ends, employees who need to take more time off may qualify for Illness Benefit (see above.)

The government has stated that daily earnings threshold cut-off point will ensure employers do not face excessive costs in relation to employees who are on high salaries. However there is nothing to prevent employers offering better terms or unions negotiating for more through a collective agreement.

What if an employer already provides a sick pay scheme?

The Bill also provides that the obligations under the legislation will not apply to an employer who provides benefits under a sick leave scheme that are, as a whole, more favourable than the statutory scheme.

Employees on Probation

Where an employee is on probation, is undergoing training, or is employed under a contract of apprenticeship the Bill provides than an employer can (in certain circumstances) require the probation, training or apprenticeship be suspended during the period of statutory sick leave and be completed by the employee at the end of that period.

We will keep Members updated on the progress of this important new piece of legislation, including any amendments that are made before it becomes law.

Case Law Review

Disability discrimination and the obligation to afford an employee reasonable accommodation

The definition of disability in Ireland is much wider compared to the UK. In Ireland short-term conditions can amount to a disability; by comparison, in the UK the condition must have a substantial adverse effect on the individual’s ability to carry out day to day activities and that effect must be long-term. However the concept of reasonable adjustments is reflected in Ireland’s duty to provide reasonable accommodation.

In Kevin Roberts v United Parcel Service of Ireland Ltd the Labour Court found the Complainant’s dismissal was discriminatory and the employer had failed to offer reasonable accommodation. The Complainant was awarded €75,000.

The Complainant was employed as a Senior Manager; his role involved extensive travel in Ireland and abroad. For medical reasons, he was unable to continue with the amount of travel involved; he was assessed as medically fit to return to work subject to him not being required to travel and adjustments being made to his responsibilities. As a result of his inability to travel he was dismissed.

The Respondent’s witness evidence was damning on the question whether the role was capable of adaptation to accommodate the Complainant; the Labour Court found the employer had made an assumption that it was not feasible to adapt the role to remove the travel element.

The Court stated “even if the Respondent was concerned about the long-term viability of attempting to have the job performed without this level of international travel, it was open to them to trial such an approach on a time limited basis. Had they done so, either it would have proved that such an approach was viable or, alternatively, it would have provided them with the basis to argue to the Court that it had proven not to be viable.”

This decision places a very high burden on employers when considering whether reasonable accommodation can be provided for a disabled employee. Employers are advised to assess an employee’s role in light of the medical evidence and consult with the employee and in many cases, H&S. For some roles, this may involve a “walk-around” with the employee to discuss the various elements of the job and whether they can be accommodated with or without modifications. This case however goes further by finding that an employer should consider a trial period. In some situations an employer may have reasonable grounds to believe that a trial period will be futile and, at worst, could have negative impacts on the business.

The wider impact of this decision is yet to be seen, in particular if it will be sufficient for an employer to demonstrate that it gave serious consideration to a trial period and records a reasonable rationale for not putting one in place. In the meantime employers would be advised to err on the side of caution and implement a trial period but keep it under close review so that any potential negative impacts on the business (and indeed on the employee or their colleagues) can be quickly identified and acted upon.

Could more of your workers have fixed-term protections than you realise?

The definition of a fixed-term employee (worker in the UK), and the protections afforded to them, are broadly the same across the UK and Ireland. In both jurisdictions, employee/workers who are engaged on 2 or more successive fixed term contracts totalling 4 or more years, are entitled to a permanent contract unless there are good business reasons not to do so.

The High Court in Ireland recently handed down its decision in HSE v Power, a case in which a permanent employee who was temporarily acting up in a more senior role on a fixed-term basis, was entitled to the protections of the Fixed-Term legislation.

Mr Power was invited to take up a more senior role on a temporary basis. He was due to stay in this role for either 6 months or until the role was filled on a permanent basis. This temporary appointment was extended 4 times and lasted for longer than 4 years. Mr Power eventually applied for the permanent post but was unsuccessful. He returned to his original role and submitted a claim that he was entitled to a contract of indefinite duration in the more senior post.

The case made its way to the High Court. The employer argued Mr Power was not a fixed term employee as, at the end of the acting-up contract his employment was not going to be brought to an end. The High Court disagreed and held that an employee can be engaged on a fixed-term basis even if they continue to be employed thereafter by moving on to a further contract or reverting to an earlier one. Leave has been granted to appeal to the Supreme Court.

Why is this case important? If you have employees acting-up in a role, or seconded into a more senior role, they may be entitled to that job on a permanent basis. It is therefore important to keep track of the duration of any such arrangements to ensure an employee does not end up unintentionally obtaining such entitlements.

What is happening with retirement ages?

Unlike in the UK where most employment contracts do not have a retirement age and employees can (in theory) continue working for as long as they choose, in Ireland it is much more common for the contract of employment to set a retirement age (usually age 65.)

In Ireland, the Code of Practice on Longer Working 2017 sets out the best practices to follow during the engagement between employers and employees in the run up to retirement, including responding to requests to work beyond the retirement age. The steps to be followed are like those that previously existed in the UK up to April 2011.

The Code sets out that it is good practice for an employer to notify an employee of the intention to retire an employee on the contractual retirement date within 6-12 months of that date. Recommended steps to deal with a request to work longer are set out including the frequently used option of offering a fixed-term contract post-retirement age.

Pension Commission report

In October this year the report of the Pension Commission was published that contains recommendations including:

• Employers not being allowed to force people to retire before the State pension age;

• Legislation being introduced to align retirement ages in employment contracts with the State pension age.

No decisions will be made on the recommendations until next March.

What is the current approach of the courts?

There continues to be a significant amount of case law in this area, and within the last month there have been 2 further decisions of note:

In the first case considered by the WRC, the Complainant was a nurse who was employed by a nursing home and was required to retire at 65. She notified her employer that she did not intend to retire and she wished to continue working. The nursing home agreed a one-year extension to her contract but refused a further extension without providing objective reasons for its decision.

The employer was in liquidation and did not defend the claim. The WRC accepted the Complainant had an exemplary work record and she was capable of doing the work. The WRC also found there was ample work available as evidenced by the fact the employer was recruiting both agency and non-EEA national nurses to join the team at the time of her retirement.

Highlighting the risk of setting retirement ages without considering the individual circumstances of each employee’s situation, the WRC awarded €85,000 as compensation for age discrimination. In reaching its decision the WRC found the employer had made “no effort” to comply with employment equality legislation and had failed to give the Complainant any rationale for why she was forced to retire.

The Complainant in Pat O’Donnell v Denis O’Keeffe had different fortunes before the Labour Court where his mandatory retirement at age 65 was found to be justified and his complaint of age discrimination failed.

The Complainant argued that he had no health concerns and was fit to remain employed in his role. He requested a 12-month extension to his contract which was denied.

The Respondent’s case was that the Claimant’s role (a service engineer) was specialised and that it takes 6 years training to do the job. Evidence was given of the safety critical nature of the role and the employer argued that to ensure the safety of the employees, the only alternative to a mandatory retirement age was mandatory health testing, which could bring an employee’s career to an abrupt end.

Evidence was also given regarding the requirement for substantial training and investment in apprentices. The employer argued that the mandatory retirement age was objectively justifiable for succession planning as they would plan to have apprentices trained to step into the retiring employee’s role.

The Labour Court accepted the Respondent’s arguments and found there was a legitimate aim in ensuring a through flow of appropriately qualified service engineers and to ensure that employees were not required to continue working until they were unable to perform the duties.

These contrasting decisions highlight the need for an employer to be able to prove that its retirement age corresponds to a genuine need or aim. As set out in the Code, such aims can include: allowing younger workers to progress; H&S concerns; personal and professional dignity; and succession planning, but employers must prove how these are relevant to their specific business