Key Contacts: Patrick Walshe – Partner
The Workplace Relations Commission (“WRC”) recently handed down an interesting decision in relation to the new sick leave provisions.
The Complainant alleged that Musgrave Operating Partners had breached the provisions of the Sick Leave Act 2022 (“the Act”). She had worked for her employer for 16 years.
The Complainant was ill and as a result, was absent from work for four days in 2023. Of note is that the Respondent had a sick pay scheme in place. Their scheme provided for eight weeks paid sick leave however, the first three days of absence were considered as “waiting days” and wages were not paid.
The Respondent’s scheme was obviously markedly different to the statutory scheme, which provides for 3 days paid leave for the calendar year 2023.
In summary, the Respondent’s scheme provided the following terms:
- That any employee with six months’ service was entitled to paid sick leave;
- The first three days of absence were unpaid “waiting days” and paid sick leave commenced on the fourth day of absence;
- Employees were entitled to eight weeks’ full pay in a rolling 12-month period (less any social welfare benefit);
- The daily rate of pay was based on the average of the employee’s weekly hours in the 13 weeks preceding the fourth day of absence, divided by five; and
- To be entitled to sick pay, employees must submit medical certificates on a weekly basis.
The Respondent argued that Section 8 of the Act permits an employer to substitute a more favourable sick pay scheme in place of the terms of statutory sick leave. It was their argument that their scheme provides a greater level of benefit in comparison to statutory sick leave.
Section 8 provides that “Nothing in this Act shall prevent the inclusion in a contract of employment of a provision that is as favourable to an employee as, or more favourable to an employee than an entitlement to statutory sick leave in accordance with this Act, and any such provision shall be in substitution for, and not in addition to, that entitlement”.
Counsel for the Respondent submitted that the use of the word “substitution” must be given its plain meaning i.e. the legislation provides that an employer may have a replacement scheme that is equally or more favourable than the statutory sick pay scheme.
Under Section 9 of the Act, the following matters must be taken into consideration in assessing whether any particular scheme is more favourable than statute:
- The period of service required of an employee before sick leave is payable;
- The number of days that an employee is required to be absent before sick leave is payable;
- The length of time for which sick leave is payable;
- The amount of sick leave payable; and
- The reference period of the sick pay scheme.
Regarding the first point above, the Respondent said that the Complainant had 16 years of service and on this point, the scheme could not be considered less favourable to her.
In respect of the number of days required to be absent before sick leave is payable, the Act provides that statutory sick pay is payable from the first day in a year that an employee is absent due to illness. In contrast, the Respondent’s scheme provided for payment after three days.
The Respondent’s scheme provided a payment of 100% of an employee’s daily wages, less any social welfare illness benefit payable. This was noted to be more than the 70% payable under the statutory scheme.
Addressing the reference period of the employer’s scheme, the Adjudication Officer noted that the reference period in the Act and the Respondent’s scheme were the same and therefore equally favourable.
The Respondent argued their scheme is more advantageous as a whole and submitted that this difference should be a significant consideration in looking at whether their scheme was more favourable than statutory sick pay.
The Respondent asked the Adjudication Officer to consider the fact that their scheme was the result of a collective bargaining process and that employees and their union representatives should be free to decide what is more favourable. Overriding their collectively bargained sick leave scheme would undermine this position.
Overall, the Adjudication Officer found that the Respondent’s scheme was in fact more favourable than the provisions in statute and therefore the Complainant’s case was not well founded.
The decision highlights the WRC’s power to rule that a sick scheme, in general terms, can be acceptable even if it doesn’t allow paid leave straight away. It could be argued that the scheme in question was less favourable to those who are ill in the short term. However, the scheme was far more beneficial as a whole than that which is provided for in statute and therefore the claim was not well founded. It will be interesting to see in the coming years how the WRC will assess future claims under the Sick Leave Act 2022 as the amount of statutory leave days incrementally increases.