WRC Examines First Case Under Sick Leave Act 2022

Karolina Leszczynska v Musgrave Operating Partners Ireland ADJ-00044889 concerned a complaint to the Workplace Relations Commission (“WRC”) under the Sick Leave Act 2022 (“the Act”). The Complainant argued that she was entitled to the benefits under the Act despite her employer the Respondent having a sick pay scheme in place.

Facts: The Complainant has been employed by Respondent as a shop assistant  since 2007. The Respondent operates 22 SuperValu branches, formerly Superquinn stores.

The Complainant was absent due to illness for four consecutive days in January 2023 and was paid by the Respondent for the fourth day only, as per the Respondent’s sick pay scheme. The Complainant argued she was entitled to statutory sick pay (“SSP”) under Section 5 of the Act. Section 5 of the Act provides that employees are entitled to SSP for up to three days per year. The Respondent has a sick pay scheme which provides for eight weeks paid sick leave. However, under the Respondent’s scheme the first three days of sickness absence are considered “waiting days” and are unpaid.

The Complainant referred to Section 8(1)(b) of the Act and specifically the phrase “more favourable to an employee”. The Complainant argued that the terms of the Act were more favourable to the her as she was out for just four days and was not on long term sick leave.

The Respondent argued that the obligations under the Act do not apply as their employees have access to a sick pay scheme which, on the whole, is more favourable than SSP.

The Respondent’s sick pay scheme provides the following:

• • An employee must have six months service to be entitled to paid sick leave;
  • The first three days of sickness absence are considered waiting days and are unpaid;
  • An employee is entitled to eight weeks pay in a 12-month rolling period (less any social welfare benefit);
  • A medical certificate must be submitted on a weekly basis;
  • The rate of pay is based on the average of the employees’ weekly hours in the 13 weeks preceding the fourth day of absence, divided by five.

Under the Act, SSP is provided as follows:

• • An employee with 13 weeks of service is entitled to be paid sick leave;
  • An employee is entitled to be paid sick leave on the first day of absence;
  • An employee is entitled to three days sick leave in a year;
  • An employee must submit a medical certificate from their GP confirming their inability to attend work;
  • An employee is entitled to 70% of their average daily wages in the 13 weeks preceding the first day of absence, capped at €110 per day.

Section 8 of the Act provides that nothing in the Act shall prevent an employer from including a contractual provision that is, as favorable to an employee as, or more favorable to an employee than, an entitlement to SSP and any such provision will be in substitution (and not in addition to) an employee’s entitlement to SSP

Section 9(1) of the Act provides that the obligations under the Act will not apply to employers which provide their employees with a sick pay scheme that is, as a whole, more favourable to employees than the SSP.

Section 9(2) of the Act further provides that in determining whether a sick leave scheme confers benefits that are, as a whole, more favourable than SSP the following matters should be taken into consideration;

• • The period of service of an employee that is 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;
  • The reference period of the sick leave scheme.

The Respondent’s position was that the provisions of the Act were more beneficial than the company sick pay scheme in respect of the length of service requirement and the number of days that an employee must be absent before sick leave is payable. In relation to the reference period the Act and the Respondent’s scheme were equally favourable. However, the Respondent’s scheme was far more favourable than the provisions of the Act in relation to the number of days sick leave payable, being 10 times the amount paid under the SSP scheme. Furthermore, the Respondent’s scheme provided 100% of regular daily pay less any social welfare payable. It was on this basis that the Respondent argued that the provision under Section 5 of the Act did not apply to the Respondent.

Decision: The Adjudicator, Catherine Byrne, considering the legal framework, noted the preamble of the Act and the provisions under Section 5, Section 8 and Section 9 specifically. The Adjudicator stated that the issue to consider was whether the condition of the Respondent’s scheme, being the waiting period of three days before an employee becomes entitled to sick pay, had the effect of making the Respondent’s scheme less favourable than the SSP scheme.

The Adjudicator noted that a three-day waiting period was consistent with the waiting period requirement under the payment of illness benefit from the Department of Social Protection, and this waiting period was followed by the majority of employer schemes, with paid sick leave commencing on the fourth day. The Adjudicator stated that where an employee is paid while on sick leave for a reasonable length of time, that it was not unreasonable for employers to adopt such an approach. While it was a disadvantage for an employee who is absent for three days once in 12 months, in the view of the Adjudicator this was outweighed by waiting until the fourth day and paying sick pay for eight weeks in a rolling 12 month period.

The Adjudicator concluded that “the duration of the paid sick leave in the employer scheme, the amount of sick pay, the 26 weeks’ service requirement and the three-day waiting period combine to provide benefits that, on the whole, are more favourable to employees than the benefits under the scheme provide in the Act”.

While noting that the Complainant’s case was not unreasonable and did raise an important legal point, the Adjudicator found as a whole the benefits conferred under the Respondent’s scheme were more favourable and is encompassed by Section 9(1) of the Act.

Takeaway for Employers: Notably, this is the first case in which the WRC has been asked to consider any complaint brought under the Sick Leave Act 2022. It does, provide useful insight into what must be considered when determining whether an employer’s scheme is more favourable than the SSP scheme. The key takeaway is that the company’s sick pay scheme must be considered “as a whole” to be more beneficial than the statutory sick pay entitlement. It is not based on individual circumstances. As more decisions  emerge from the WRC on this point, they should provide further clarity on the weight that should apply to the consideration under Section 9(2).

Notably, from 1^st January 2024 the SSP entitlement will increase to five days sick pay per year, with further incremental increases culminating in an entitlement to 10 paid sick days in 2026. Employers will need to review their sick leave policies accordingly and assess whether their policies are more favourable as a whole to their employees than SSP. Without this exercise, they run the risk of falling foul of the exemption that is provided under Section 9(1).

Link – https://workplacerelations.ie/en/cases/2023/september/adj-00044889.html

Authors – Ethna Dillon and Anne O’Connell