New legislation will expand sick pay and sick leave rights to workers

Statutory regime may not be fully in place for years as employers given time to adjust

Under proposals being brought to Cabinet, employers will told to guarantee a minimum number of paid sick days annually from 2022. Photograph: iStock

Under proposals being brought to Cabinet, employers will told to guarantee a minimum number of paid sick days annually from 2022. Photograph: iStock

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Greater sick pay rights are to be extended to all workers from next year, with employers told to guarantee a minimum number of paid sick days annually from 2022, under plans to be considered by the Government on Wednesday.

However, it will be several years before a promised statutory sick pay regime is fully in place in order to give employers time to adjust.

Minister for Enterprise, Trade and Employment Leo Varadkar will bring proposals for new legislation giving all workers the right to be paid sick leave to Cabinet on Wednesday. The Government estimates up to half of workers do not currently have such coverage.

While the Bill will provide a minimum level of protection to employees without entitlement to company sick pay schemes, it is understood that the legislation will specify that employers may offer better terms and unions may negotiate for more generous schemes through collective agreements, including agreements that are already in place.

Final decisions

The number of days per year which employers will have to provide will kick in from 2022 and is likely to increase in following years; however, final decisions on these matters will be taken at Cabinet. Additional costs arising from the scheme are also likely to be capped.

The Tánaiste has previously said he intends to introduce statutory sick pay this year. It is understood the new system will be phased in over a given period – sources indicated perhaps three or four years – to give employers a chance to adjust to the new regime.

Many workers without sick pay are employed in lower-paid roles, with the Covid-19 pandemic and associated transmission in the workplace bringing an emphasis on terms and conditions for these employees.

A Regulatory Impact Assessment of the new Sick Leave Bill is also likely to be published. In a note to the Oireachtas Committee on Enterprise, Trade and Employment in March, the Department of Enterprise, Trade and Employment said the Government’s planned new statutory sick pay scheme would be aimed at being fair and affordable. It said it was not intended to involve placing undue costs on employers.

‘Extra costs’

The department told the Oireachtas committee it was “particularly conscious of any extra costs on micro-enterprises and small businesses”. The Government last year established an inter-departmental group to look at the issue of sick pay and, as part of a public consultation process, nearly 120 submissions were received.

Meanwhile, Minister for Finance Paschal Donohoe is to update cabinet colleagues on changes agreed by G7 finance ministers over the taxation of multinationals. The potential costs of the move to the Irish exchequer has been estimated at between €2.2 billion and €2.4 billion, about a fifth of corporate tax revenue.