IMF report on sick pay may be incorrect

Mon, Jun 18, 2012, 01:00

AN IMF report supporting statutory sick pay proposals that employers pay up to the first four weeks of benefit may be based on incorrect information, according to the Department of Jobs.

A spokesman for Minister for Jobs Richard Bruton said the extract in the IMF report on illness benefit “says the State currently pays sick pay from the outset which is not the case as no payment is made for the first three days of illness”.

In its staff report – the IMF’s response as part of the troika’s latest quarterly review of Ireland’s bailout programme – the organisation said it “encouraged reforming sick leave policies by requiring employers to pay for the first two to four weeks of illness”.

IMF support for the proposals, first mooted by Minister for Social Protection Joan Burton, puts them back on the Government’s agenda for the next budget.

Ms Burton proposed employees pay the first three days of sick leave and employers the first two to four weeks to save up to €89 million of the State’s annual €876 million sick leave bill.

However she was forced to abandon the plan during negotiations on last December’s budget following opposition from Mr Bruton and the Fine Gael party, who were against measures having the effect of increasing the cost of employment.

Ms Burton said yesterday that “this is one of a number of items which will be discussed by the Cabinet”.A spokeswoman declined, however, to respond to the question of whether it would be a “do or die” issue for Labour as the junior Coalition partner given the apparently overwhelming opposition of Fine Gael.

Mr Bruton’s spokesman, who pointed to the error in the IMF report, also said the views expressed were those of the staff team and did not necessarily reflect the views of the IMF’s executive board.

Ms Burton earlier dismissed suggestions of tension between herself and Mr Bruton over the proposals.

She said on RTÉ’s This Week programme that it was not a question of her or any other Government member winning on the issue.

“It’s a question of what’s best for our society,” she said.

The OECD had produced very detailed data showing Ireland was “completely out of line” with other countries and the total cost to the exchequer of illness, disability and invalidity was almost €3 billion.

A note on the statutory sick pay scheme prepared for a consultation process, hosted in February by Ms Burton with stakeholders, shows the cost of illness benefit had risen from €330 million to €876 million from 2001 to 2011.

It highlights the view of John Martin, director for employment, labour and social affairs at the OECD, that changes in sick pay benefit would, the note states, “stimulate a greater focus within companies and public sector bodies on absentee management”.

Mr Bruton’s spokesman said Irish employers “already have extremely low levels of absenteeism” and the private sector “is already below countries which are cited as international best practice”.

Taoiseach Enda Kenny last night supported Mr Bruton’s view on private sector absenteeism.

He said no decision had been made on the issue but “there’s a world of difference” between public and private sector absenteeism. Just under 300,000 of the 1.8 million people in employment work in the public sector but Mr Kenny said: “I understand that 5,000 people every day are out on sick leave in the HSE. The private sector is a very different world.”

Ms Burton proposed Ireland would get into line with other countries over a period of time.

It would have a “very positive effect in terms of people at work” because the emphasis “would be on wellness rather than sickness”.

Smaller employers said they had “particular difficulties” with the proposal and she was open to discussions on this.