by Catherine O’ Flynn, Partner in the Employment Law & Benefits team at Mason Hayes & Curran LLP.
The Labour Court has overturned a WRC award under the Sick Leave Act 2022, confirming that employers with more favourable sick pay schemes are exempt from statutory sick pay. As the first successful appeal under the Act, our Employment Law & Benefits team outlines what this means for employers.
Background
The complainant[1] was employed by the respondent as a Quality Control Analyst. She was provided with a contract of employment which sets out the company’s sick pay scheme. It provided that sick pay was payable subject to eligibility conditions and in compliance with the company’s Absence Management Policy.
The employee had six separate periods of sickness-related absence between August 2023 and December 2023. This triggered the Absence Management Policy and led to:
- An investigation meeting
- A referral of the complainant to Occupational Health, and
- A disciplinary meeting
The employee received a verbal warning for breach of the Absence Management Policy. She appealed but was unsuccessful.
The employee was subsequently absent in May 2024. She was not paid sick pay under the employer’s scheme during that time. This was because she had been found to be in breach of its Absence Management Policy.
WRC claim
The employee brought a complaint to the WRC and was successful. She argued that in circumstances where she became ineligible to be paid under the employer’s scheme during the period in question, the statutory regime should apply to her. She was awarded €500 compensation.
Labour Court appeal
On appeal, the Court noted that section 9(1) of the Sick Leave Act 2022 relieves an employer of the obligation to pay statutory sick leave. This applies where the employer has a sick leave scheme which is “as a whole” more favourable to the employee than the statutory sick leave.
In this case, both parties had acknowledged that the employer’s scheme was “as a whole” more favourable and so the obligations under the 2022 Act did not apply to the employer.
The Labour Court held that section 9(3) of the 2022 Act makes clear that employer sick pay schemes may be subject to conditions. In addition, access to an employer scheme can depend on compliance with those conditions. It was not disputed by the employee that she did not meet the eligibility criteria of the employer’s scheme in May 2024 due to the extent of her illness-related absences from the workplace.
It was held that the employer had no obligation to participate in the statutory scheme given that section 9(1) applies. The provision “absolutely exempts” an employer in these circumstances and allows for no exceptions.
Key takeaways for employers
This decision is a significant result for employers with generous sick pay schemes.
It dictates that, so long as an occupational sick pay scheme is holistically better than the statutory minimum, an employer is not required to provide statutory sick pay. An employer’s internal conditions for the scheme, such as withholding pay from employees who are under disciplinary sanction, can therefore be maintained without breaching the Sick Leave Act 2022.
It also highlights that section 9(1) of the Act provides an absolute exemption to the employer from the obligation to apply the statutory leave scheme. This applies where the employer’s sick pay scheme is “as a whole” more favourable to the employee than the statutory sick leave.
It is vital that employers still ensure that their disciplinary processes are fair to avoid claims of discrimination, penalisation and unfair dismissal.
[1] SK Biotek Ireland Ltd v Shannon Reina SLD262
About the author
Catherine O’ Flynn is a Partner in the Employment Law & Benefits team at Mason Hayes & Curran LLP. Catherine has over 20 years experience practising exclusively in the area of employment law and has been involved in many leading employment cases. She is the former Chair of the Law Society of Ireland Employment and Equality Law Committee and in that role made various submissions to the Irish Government on matters of Irish employment law.
Catherine advises on all contentious and non-contentious employment law matters with a particular expertise in equality issues and age-related matters. She advises clients in all sectors to include the regulated financial services sector and sports sector.
Catherine regularly appears on national radio and in the national media/press as an employment law thought-leader.
