The meeting is convened for the purpose of considering the Sick Leave Bill 2022, which was referred to the select committee by order of the Dáil on 7 April 2022. The purpose of this Bill is to provide for a scheme of statutory sick leave by employers covering the existing gap caused by illness-benefit waiting days and set a minimum floor of entitlement for employees who are unable to work due to illness or injury. I welcome the Minister of State at the Department of Enterprise, Trade and Employment, Deputy English, who is accompanied by his officials. Does the Minister of State want to make a brief comment before we start?
Sick Leave Bill 2022: Committee Stage
Do you want me to make my opening comments?
Yes, if the Minister of State wants to do so.
I am conscious I was not there for the Second Stage discussion in the Dáil. I thank the Chair for facilitating this legislation quite quickly and for his work on the pre-legislative scrutiny of this legislation. I apologise for the slight delay at the start of the meeting. I am very pleased to have the opportunity to discuss the Sick Leave Bill 2022 with the committee today. It will ensure that for the first time in Ireland all employees will have a statutory entitlement to paid sick leave if they are unable to work due to illness or injury.
The pandemic exposed the vulnerable position of many people, especially in the private sector, when it comes to missing work due to illness. Our view, which I think is shared by the majority of the committee, is that workers should not feel they have to go to work when sick because they will lose all of their income otherwise. It is not just bad for them, it is bad for public health, as sick workers might infect colleagues, clients and customers and be more likely to make a mistake, injure themselves or do harm to others as well.
As a starting point, this scheme will cover the three waiting days before eligibility for illness benefit from the State kicks in. As we know, illness benefit can last up to two years. Where an employee has an extended period of illness, this scheme will operate seamlessly with the existing illness benefit scheme and system. Once employees have exhausted their entitlement to paid sick leave from their employers, they will move on to illness benefit paid by the State, provided they have made adequate PRSI contributions.
The length of coverage will increase over time and eventually provide for an entitlement to ten working days or two weeks annually in the fourth year of the scheme's operation.
Events of the last two years have shown how necessary this legislation is. While it represents a new expense for some businesses, and we understand the pressure that will put on them, it is common across Europe that employers cover a portion of sick leave costs. We have taken care to ensure that costs are not excessive. That is why there is a four-year lead-in period with this legislation.
Some have said that they think the Bill goes too far, and others argue that it does not go far enough. We believe, in general, that we have got the balance right with the legislation we are proposing here.
Ultimately this Bill means that workers will not have to attend work while sick through economic necessity. This will be one of the positive legacies to emerge from the pandemic. While Deputies might differ on the approach, we are all agreed that this legislation is the right thing to do and the sooner we can implement it, the better.
I thank Deputies for their contributions on the Bill at the earlier Stage and I look forward to our discussion here this morning.
A number of amendments tabled on Committee Stage have, unfortunately, been ruled out of order. Amendments Nos. 1 and 9 in the name of Deputy O'Reilly form a composite proposal which would allow employees to self-certify for sick leave instead of being required to provide a medical certificate. We will come to all of these as we go through the Bill.
Amendment No. 7, in the name of Deputy Paul Murphy, would require a medical certificate only after the tenth day of sick leave. Amendment No. 8, in the name of Deputy Ó Ríordáin, would only require a medical certificate after three consecutive days of illness. These amendments would create a statutory entitlement to sick leave pay for public servants above and beyond what is currently the case under regulations. This would potentially lead to greater costs for the Exchequer arising from sick leave payments.
Sick leave remuneration for public servants is determined by way of ministerial regulations made under the Public Service Management (Recruitment and Appointments) Act 2004. The current regulations under the Act are the Public Service Management (Sick Leave) Regulations 2014, Sl 124 of 2014. Under those regulations, public service employees must provide a medical certificate to qualify for sick pay, except where a local employer decides to waive that requirement. In accordance with Standing Order 212(3), the amendments must be ruled out of order as they have the potential to impose a charge on the revenue.
Amendments Nos. 25 and 27, in the name of Deputy Paul Murphy, would remove the 20-week cap on the amount of remuneration that may be awarded by the Labour Court. This exposes the Exchequer to higher costs in the event of a public sector employee winning a case. In accordance with Standing Order 212(3), the amendments must be ruled out of order as they have the potential to impose a charge on the revenue.
The remaining amendments will be considered at today's meeting. The groupings are as follows: amendments Nos. 2, 3 and 16 to 18, inclusive; amendments Nos. 4 to 6, inclusive; amendments Nos. 10 to 14, inclusive; amendments Nos. 20 to 24, inclusive; and amendments Nos. 26 and 28. I propose that we try to complete our consideration of the Committee Stage of the Bill today. Is that agreed? Agreed.
Does the Deputy want to speak on that?
The Law Library, when it was reviewing the Bill, offered a view on the Bill itself. One of the points it raised was the absence of a definition of "illness or injury". Having gone through it - I will not use the word "reform" because it was really a slashing of the public service sick pay and sick leave scheme - I am aware it is really tough to define that, notwithstanding that it referenced the fact and raised a concern that there is not an existing definition. I would appreciate if the Minister of State would investigate it further or if he was in a position to confirm that the Department does not have any issue with it.
I am raising it because it was raised by legal experts. There is a difficulty. As we found out, one cannot draw up a list. Is the Minister of State concerned or is he happy that, without the definition, it is okay?
I am conscious that this amendment is not being allowed but it is something on which there could be general discussion. It came up in a previous discussion on this Bill as well. Generally, in the legislation, both in this and in social welfare legislation, it is not defined and it is accepted as the ordinary meaning. That has been acceptable and has worked and I have heard no real argument not to continue with that.
If there is a major issue the Deputy wants me to have a chat with her about before Report Stage, I can do that. It is not something we are concerned about. The Deputy obviously is so I am happy to chat to her about it if she wants before Report Stage.
I welcome that. I am willing to be persuaded that it is not an issue. I raise it because it is not defined. I am happy to have a discussion with the Minister of State on it.
Amendments Nos. 2, 3 and 16 to 18, inclusive, are related and may be discussed together.
I move amendment No. 2:
In page 5, to delete lines 23 to 25.
This goes to the heart of one of the big problems with the Bill, which is the number of sick days. The Government proposal is that we start with three and that it will be increased over time, subject to the Minister agreeing to do it. There is no guarantee in the Bill that will even happen.
My amendment is simple. It is to remove the limitation of three and to state that people are entitled to sick pay when they are sick, regardless of the number of days they are sick. That should be a basic right and we should deal with the consequences of that in terms of compensation for employers, etc., at a later stage.
The basic point is that when people are sick, they should be entitled to sick pay and we should not arbitrarily limit it. We certainly should not arbitrarily limit it to three days, which is a very small number of days for an entire year.
The Labour Party Private Members' Bill provided for ten days' sick leave, and rising to 30. I suppose my party's concern with the Bill is that it is not robust enough and that aspirations, as has been suggested, from the Minister of State, Deputy English, and from the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Varadkar, are not hard wired into the Bill. We want to delete the same lines and to insert, "An employee shall be entitled to up to and including 10 statutory sick leave days in a year, or such additional number of statutory sick leave days (if any) up to 30, as may stand specified from time to time by order of the Minister ..." The Minister would have within his or her power the ability to increase that to 30 days over a period of time, but we have to start with ten. That is our strong view. If the Minister of State does not accept the amendment, I would be happy to discuss it or to try to convince him about a period of time, but we intend to push it again on Report Stage. However, I am interested to hear what the Minister of State has to say.
I stated at the outset that I understand members will have different views on this. What we are trying to achieve here is that, as a starting point, this scheme will cover the three waiting days before eligibility for illness benefit kicks in, and that can kick-in for two years thereafter. I want the members to bear that in mind as we have this discussion.
The Tánaiste has been very clear on the medium-term plan to make sure employers know what their obligations will be. The statutory entitlement to sick pay will be phased in as part of a four-year plan and will initially be three days a year once the Bill is enacted and commenced. This will effectively fill the gap in coverage, as I said, caused by illness benefit waiting days. It is important that we close that gap at the outset. Closing the gap of current waiting days before being able to access illness benefit will help reduce the numbers of sick employees presenting for work.
This four-year plan takes account of the current economic climate and the existing financial pressures on businesses. We must bear in mind what businesses have been through for the past couple of years with Covid and what is now happening in relation to the war in Ukraine. The latter is putting extreme pressure on businesses. We want to get the balance right here with this legislation but it is also important that we try to protect those jobs that are there and give businesses a change to adjust to this scheme over a couple of years as it is being implemented. The number of days will increase incrementally, with the goal that employers will eventually cover the cost of ten sick days per year from year four.
We fully understand many businesses are struggling with additional costs because of the conflict in Ukraine, Brexit, our coming out of Covid and the disruption these have brought. That is why we have chosen to phase in the new right. While we all agree it is important to introduce this right, there has to be a balanced approach to it.
Amendment No. 16 would provide that the number of paid sick leave days could not be reduced below ten by any ministerial order. As statutory sick leave will be introduced at three days per year, this amendment would not align with the timeline of the scheme proposed.
Amendment No. 17 would not restrict the number of days by which statutory sick leave could increase in any given year. Subsection (2)(b)(ii) currently stipulates that the Minister may not increase the number of sick leave days by more than three in any 12-month period. This provides certainty to employers by ensuring that unexpectedly large increases in the number of sick leave days will not be introduced. This is a sensible approach that allows businesses to plan ahead and anticipate the potential cost increases, which are significant for many, certainly for SMEs.
Similarly, providing the Minister with the ability to increase the number of sick leave days by ten days, as per amendment No. 18, under any one order would be disproportionate and unfair to employers. Such a dramatic increase in coverage could have unintended negative consequences, with employers unable to afford the associated costs. Again, we have to bear in mind that it jeopardises jobs if we force too many costs on employers. We are trying to get the balance right. I ask the members to try to understand our approach and that there will be incremental growth over a four-year period. This, we believe, is balanced and fair, and recognises the circumstances we are in.
Where did three days come from? Why is it three rather than two, four or five? How did the Minister of State come up with three? We are being asked to agree to three days because it is to increase to ten. We are being reassured that this will happen but the Bill does not provide such reassurance. Stitched into it is a wide-open loophole that means the current or another Government may well decide not to increase the number. The factors the Minister must have regard to in section 6(1) in deciding whether to increase the number include the state of the economy generally, the business environment, national competitiveness, the potential for any disproportionate or adverse effect on the economy generally, specific sectors of the economy, and employers and employees. The Minister must also have regard to the views of employer representative bodies. I would bet quite a large amount of money that the view of the employer representative bodies on increasing the number of sick-pay days will be that we should not be increasing it because the employers do not want to pay for it.
Even if we get to ten days, does the Minister of State not accept that we would still be far behind what is normal in many countries in Europe? In Austria, for example, workers are entitled to between ten and 16 weeks. It deals in weeks, not days, on 100% pay. In the Netherlands, people can get sick pay for up to two years. There are many other examples. Does the Minister of State accept that an entitlement of even ten days leaves us significantly lower than where we need to be?
On our amendment, the circumstances are frustrating. It is a bit like talking to a residents’ group about a planning application in that what is in the planning application is what matters. What is in the legislation is what matters, not what the Minister of State said here or what the Tánaiste said, or what is said in any media interview about aspirations. If it is in the legislation, it is in the legislation. No Minister will be in breach of the law or regulations if he or she still stands over three sick-leave days in five, ten or 15 years, because it will be covered by the legislation. That is it. The Minister of State may aspire to increase the number to ten but it is not written down. That is not how we do business.
It almost feels as if the Government views the sickness of an employee in terms of how it affects the employer rather than the employee. That is not how we should do our business, I contend. Following on from what Deputy Paul Murphy said, how did the Government come up with the number of days? How does it equate with the European norm? How are we supposed to do our legislative work if aspirations uttered by Ministers are not written down in black and white?
I am conscious that, in 2014, when the sick leave entitlements for serving civil and public servants were cut in half, mention was made by people, some of whom are still in government, that the measure was intended to improve productivity. I share the concerns regarding the link between that and sick leave entitlement. Would the Minister of State be open to strengthening what is currently in the Bill to ensure we will get to the increased entitlement rather than saying there is an aspiration to get to it? He should ensure a much clearer pathway.
Previously, Ministers took to the microphone to talk about workers’ rights but when they were presented with an option in this regard, they cut in half the entitlement for serving civil and public servants. My concern is that the provision in the Bill is not robust enough. I am curious about this. As the Deputies just asked, where does the figure of three come from? Would the Minister of State be open to strengthening the Bill to address my wariness about extending flexibility? I mean no disrespect to the Minister of State but I am referring to someone who might be sitting in the Minister of State’s chair in the future. The flexibility could mean that there will still be only three days in ten years’ time, and the Minister will have stayed within the law. There is a genuine concern.
I have a couple of points. The legislation is designed to facilitate whatever Minister sits in this chair in the years ahead. We need to bear in mind that the number today is zero and that we are asking businesses and employers to adapt to a new statutory sick pay scheme, which they are paying for. It is only right and fair that we introduce it over a period of time. It is about the management of businesses. Some would say it is not about management, but we are trying to get the balance right. The measure does not favour any one sector or social partner over another; it is about achieving a balance that protects jobs, will continue to grow jobs and enable businesses to continue while recognising the benefits for everybody of having a statutory sick pay scheme. It is a matter of introducing it at a pace that is manageable.
What is proposed compares quite well with the arrangements in many European countries. The number of days varies from country to country. The majority have around ten days or fewer. Australia, New Zealand and Canada all have the ten days. The commitment by the Cabinet, as expressed by the Tánaiste in Dáil debates and discussions here, is to go to ten days over four years. The legislation does not cap that. There is no ambition capped either. There is flexibility for future Ministers to go beyond ten days if they so choose. In the legislation, we are asking that the Minister reflect on the circumstances in the country on any given day. The Minister must consult not only employers but also all social partners. This was expressly requested by this committee. It is written into the Bill.
The reason the measure was suggested for regulation, not legislation, is that this is the best way to adapt to any situation as a country. The members have been discussing here for nearly a year the permits legislation that I am trying to adapt and make changes to. Since the provisions are expressed in primary legislation rather than regulations, it is very hard for us to work with them and make any changes needed or recommended by most people here. If the provisions are in regulations, the Minister can adjust and make changes much more quickly on behalf of the country at the right time to reflect current conditions. That is why we are not over-prescribing in primary legislation. Primary legislation does not always work to the benefit of everybody.
On the matter of the three days, following the discussion in the very early stages of this in the Dáil a commitment was made by the Tánaiste, Deputy Varadkar, to introduce this legislation. Thereafter, there was consultation across all the Departments and among all the social partners. Members of this committee and many others went through all this. We fixed on an entitlement of three days to begin with to close the initial gap associated with the illness benefit because nobody gets anything for the first three days as matters stand. That was the most important gap that the Tánaiste wanted to close. The aim was to build on that thereafter. That is why we introduced the three days, as well as consultation with everybody.
It is proposed to have three days, moving to ten days within four years. We believe this is a fair and reasonable request of employers. Members should bear in mind that employers are paying for this. That must be understood and accepted. Future Ministers can decide to make changes to the proposal if they want, but this is what we are recommending at the moment.
I hope members will understand that our job in the Department of Enterprise, Trade and Employment is to get the balance right to protect workers at work, prevent the unnecessary spread of illness, encourage people to stay at home when unwell, try to cover the cost of their staying at home, and recognise that employers of all sizes have to implement this scheme as a statutory sick pay scheme.
I, like other members I am sure, want to see a sick pay scheme implemented. The Minister of State pointed out that employers are paying for this, which is the truth of it. In some of the preamble to the Bill he tried to give credence to the difficulty out there and he mentioned the social partnership. I wish to raise two matters. One is something I asked before and raised in the Dáil on a number of occasions which is why Irish Small and Medium Employers, ISME, is not part of this leave Bill. I do not believe small businesses are being properly represented as part of the social partnership agenda.
Further, employers will be quite willing to look at expanded sick pay schemes but the problem is that they are paying for it. One of the things this Bill does not address is any support for small or micro-enterprises which may have to take on people to fill a role while an employee is sick, which happens quite a good deal in many industries.
On the last occasion I asked that the Minister of State might look at tabling an amendment to provide a tax rebate, or something like that, for this double whammy where a small business has to put up the resources for the scheme and then has to pay, possibly through an agency, to find support and help. These employers are getting no support for that. The larger employers, as we know, already have sick pay schemes in place because they can afford them. The problem here is that we are trying to legislate for everybody but, as the Minister of State rightly pointed out, this is going to have an effect on employers. We cannot have the idea of having unlimited sick days but we want to start with something fair.
This is where I would be coming from. I ask the Minister of State to consider tabling an amendment on some type of tax rebate scheme, which may be one of the easiest things to do, to take account of small and micro-enterprises which are going to be significantly impacted, particularly as this scheme is extended.
I thank the Minister of State for his work on this Bill to date. The Bill is very welcome but it has caused a great deal of concern among small business owners. We are all aware well aware that the bulk of businesses are small, owner-operated businesses. This will pose an additional headache for them while at the same time they recognise that the Bill and the statutory right to sick leave and pay needs to be enshrined in legislation.
It is important safeguards are put in place for those small businesses and, following on from what the previous speaker said, those small businesses feel greatly at risk. We are very much an enterprise committee here and there is an onus on us to help cultivate and generate enterprise across the country. Several small business owners I have spoken to would see this scheme as a possible deterrent to them taking on staff in the future. There has to be scope to look at the possibility of a rebate scheme where employers can avoid a double whammy. This has been raised with us by many representative groups and small business owners who will have to pay the sick pay and, in the case of a business that perhaps only employs three or four people and is public-facing, will have to bring in a person in to cover that work for the day. They will face a double whammy. Some engagement with Revenue should be possible so that we can come up with a rebate scheme that ensures those businesses are not penalised. Even with the smallest of businesses, which may not have the most sophisticated risk matrix, they will operate that risk matrix but within their own heads and will see this as a high-risk scenario. Provision needs to put in place so that they are not being penalised on the double. I would hope this suggestion can be considered in an amendment.
I thank the Minister for his work on this Bill, which I am fully behind. Sick pay should be there for workers but I have been contacted by small family businesses with a number of employees, and as was mentioned by the previous Deputy, it is very difficult to meet that expense. Is there any format or way within the Bill through which they can be provided with some form of rebate?
This issue came up from the very start. We are trying to strike a balance and everybody recognises that workers need a right to sick pay and that traditionally this was provided only by the State and the employer did not play any role and that was not fair or balanced. The difficulty with the proposal, and I can understand how others can say that sick pay should be extended, is that the reality is that the State takes on the responsibility after a certain period of time and sustains pay but in many workplaces, of course, there are much better terms than the State arrangement alone. We are trying, therefore, to provide a safety net for people who are not in those more generous schemes in order to balance that against the reality that other Deputies referred to, which is that there are many small businesses with a small number of employees who are customer-facing and do not have the sorts of options to substitute and to cover which larger employers who are not in the customer-facing business have. This means that they have to get somebody in when somebody is out sick. There is this balance to be struck and I am unsure as to how it is to be resolved.
At a minimum, I would hope the Minister of State would commit to having a review done after a reasonably short period to see how this is impacting on those smaller employers, with the possibility of some form of relief for them other than the long-stop one which is in the Bill of proving inability to pay. That is a fairly draconian system in order to establish that level of proof.
The Minister of State is quite correct in that we are trying to strike a balance. Employers have a responsibility here but we have to try design that responsibility in a way that does not unfairly impact on certain types of employer. There is scope to try to explore that further before Report Stage, if the Minister of State can do so, or at least by way of a review at a very early date to address the fears of excessive burdens being placed on some of these labour-intensive customer-facing roles and the need for some relief.
A number of issues have been raised. I share the concerns raised by the previous speakers. To address Deputy Bruton, I have committed to a number of employers that we will track and review this to see if we are putting jobs in jeopardy or are placing an excessive a cost on businesses. The Tánaiste is very clear that we will phase this in in order to give such businesses time to adapt and to cope with it. It could potentially increase the payroll bill by 0.8% to 1% in some cases, which may put extreme pressure on businesses, certainly from a cash point of view if one has to replace customer-facing roles. We will monitor this and will continue to address the concerns of Deputies Shanahan, Flaherty, Duffy and Bruton, and others who are concerned about engaging with the small and medium-sized enterprise, SME, community as we track and watch this as it is rolled out. We will then seek to find ways to support, where possible, these businesses.
Rebates are not very proportionate and have not worked very well in the past when it came to other redundancy schemes, and so on. All of us want to ensure we do not jeopardise any jobs or businesses. There is, as had been referred to by Deputy Bruton, in section 10 an inability to pay provision but that may come too late for some businesses or is a hard bar to reach. It has not been used, as far as I am aware, in the minimum wage legislation. We will track this and try to find other ways to support the SME community, if needs be, through our business development agencies, such as our local enterprise organisation, LEO, network or Enterprise Ireland. We are trying to find ways to provide support, if needs be. We will monitor this but such a provision does not belong in legislation. What is important here is that we introduce a statutory sick pay scheme and that we track that aspect of it.
This is similar to the provision where the Minister of the day may adjust and make recommendations every 12 months to increase this. The effect on the economy at that time will be tracked, not just for employers but also for employees in terms of cost of living and so on. That will be monitored to get the balance right, which I stress here.
We recognise this is not the ideal time to bring in this legislation given what has happened over the past number of years with Covid-19 and Ukraine. We recognise also, however, that we are an outlier in Europe by not having a statutory sick pay scheme. It is important we bring one in and the commitment was made on the floor of the Dáil that we would do that. We must ensure we do so in a manner in which businesses can cope with it.
There is a commitment to keep PRSI as low as we possibly can for employers, given with the effect that this could have on employees. This scheme may limit the need to increase PRSI on employers, so there may be an offset of cost there. That is something that we will track and keep an eye on as well.
I have talked to many in the SME community and I have met many businesses, as has the Tánaiste and the Minister of State, Deputy Troy, over perhaps the past year to 18 months and have discussed the legislation with them.
We have been trying to encourage them to work with us on this scheme and to recognise the importance of protecting their employees and ensuring that employees do not feel that they have to go to work. Everyone would benefit from that - other staff, customers and clients. Many members of the business community throughout the country tell us that they cannot get staff and access the skills they need. Many of those are customer-facing roles. If we can strengthen overall terms and conditions, we believe it will assist in competing for talent.
In the European context, we are out of sync by not having a statutory sick pay scheme. We are constantly striving to get the balance right between protecting employees and protecting employers. The Government's response in recent years has shown that we are on the side of job creators as well as employees, in light of our supports during Covid, which were of equal benefit to both. We are introducing this legislation in that spirit and in a balanced manner, with an implementation phase of four years committed to by the Cabinet. I hope members will accept that we are doing our best to get the balance right. We recognise that it puts pressure on SMEs. Larger companies can probably absorb these costs. It is fair to say that many employers already have their own sick pay schemes. While many others do not have formal schemes, they operate some schemes, look after their staff well and facilitate them when they are sick or have other commitments. There is a balance. This Bill puts a formal scheme in place, but many employers already operate within this space well, and we should recognise that.
I do not wish to prolong the debate unnecessarily because we have work to do. The Minister of State has just committed to a review of how this legislation will affect employers over time. Can I assume the same review will investigate how it is protecting the health of workers? Our conversation already feels imbalanced.
Of course. That will be recorded. In line with the committee's recommendation, the Minister of the day will monitor and check all of that before recommending additional days at any stage. When we say that it is a given that the legislation is balanced for employees and employers, we will of course review that, but the question in this context was on additional supports for businesses to cover the cost. That element is not in this legislation because it cannot be, but we have told employers of all shapes and sizes that we will track costs with our ongoing business supports that are tailored to jobs. Any Minister who sits in this chair and recommends increasing the number of days to ten days and beyond, if that is what he or she wants to do, must review the circumstances of the day and engage with all of the social partners, which was a fair recommendation of this committee. That will allow for amendments.
How will the Government track this? The Minister of State was responding to a question on businesses, but it is important that the scheme's operation be tracked on behalf of workers as well. As Deputy Bruton pointed out, a trip to the Labour Court can be a draconian process and take a long time. That is also true for workers. If they are not given their entitlement, they will have to go through a not dissimilar process.
Will the Minister of State outline more formally the intention as regards the review and how it will be done? It cannot only be done through the Labour Employer Economic Forum, LEEF, because the Family Business Network, FBN, is not represented on it. Clearly, the concerns being raised are being raised by smaller businesses. Concerns are also being raised with me by people working in smaller businesses, who tell me that we can introduce all the laws we like, but the people they work for will not follow them. The scheme has to be tracked formally. I appreciate and respect that the Government is constantly in touch with businesses and workers' representatives, but this needs to be a more formal process. If the employers go to the Labour Court – I do not believe they will – to say that they cannot pay for the scheme, this matter needs to be examined because it means that workers are not getting their entitlement to sick leave. We need a process that is more formal than "keeping an eye on it", one that is done through LEEF but also has all of those who are involved at the table.
There are labour protections, and these are tracked by the Labour Court and the Workplace Relations Commission, WRC. The Deputy is asking for a formal review, which is what Deputy Bruton proposed. We have already given a commitment to the SME community to track this through our other business supports and business development agencies. If we need to assist, which we do regularly across many areas, we will consider the issue. I can revert to the Deputy on Report Stage on the question of building a formal review into the legislation. I believe it will be captured in the ministerial regulations. We can examine those to see if we can find a wording with which the Deputy agrees.
The Department engages regularly with all employer and employee representatives through many mechanisms regardless of whether they are in LEEF. The issue of who is in LEEF has been discussed for a long time. I would value interventions by all organisations as well as by the various committees that we have set up to review various elements. They all feed into this. Any legislation that we have introduced has been based on consultation that has been open to everyone. We will ensure that happens in this context. LEEF does not cover everything, but it is a useful process for dealing with issues like the work safely protocol. Everyone is involved in the consultations on legislation, though, and rightly so.
I would support a more robust review process in that regard. The Minister of State will see a significant change in the SME environment this year. Many companies have already availed of Government supports in terms of debt warehousing and so on. I have spoken to many businesses, particularly in the manufacturing sector. They are facing significant headwinds and none is making money. Indeed, quite a number are losing money. We all support the Government's introduction of this progressive policy, but there is a cost and it has to be balanced. Any review system needs to examine which way the incomes of small indigenous companies are going. If they are not making money, they will not employ anyone and there will be no need to worry about sick days.
I will be clear to avoid doubt. There is an exemption in the legislation from the obligation to pay sick pay under the statutory sick pay scheme. I appreciate that there is a similar exemption in respect of the minimum wage. It is not used by everyone, which I have made clear to employers and bodies on all sides that have engaged with me. That has nothing to do with whether it is onerous. Rather, the majority feel that they are able to pay the minimum wage. It is important that we keep an eye on this matter and the exemptions allowed for in this legislation. That will be in addition to what the Deputy is talking about. We will have an ongoing consultation after enactment, and it is important that we do so. I am happy to commit to it.
I accept that the committee's members want to ensure that we get this right without unduly affecting the employer or jeopardising jobs while also putting protections in place for those who are genuinely sick. Employers have told the committee and us that the certification process has to be managed well. It is important that we balance the medical certification process right. That will probably allay some of the fears that a number of employers have. To be fair, the majority of employers have been clear to us that they want to protect their staff. They recognise the importance of not having sick people at work. There will always be some who argue, but the majority have been clear to us about wanting to do right by their employees. They recognise the importance of strengthening their teams and skilled workforces and of availing of all of the supports that we have across the system, including from the Departments of Social Protection, Education and Enterprise, Trade and Employment.
This is important legislation. We have been an outlier in this area for too long, so it is important that we get this right. A review process has been built into this and all other legislation. We will learn from this one's review process as the situation involves.
As Deputy Shanahan said, the overwhelming concern being raised by small businesses – most of them are micro businesses – relates to how they have faced significant headwinds for the past two and a half years. Many of them are operating with single digit profit margins at best. Some are barely breaking even. Banks have removed their overdrafts. They are struggling, and they view this scheme as an additional challenge and burden. At the same time, though, they want to meet and embrace it in the spirit of the Bill. As the Minister of State rightly said, no employer wants to have sick staff. We have to look after staff welfare. If staff are sick, we have to give them the space and time to facilitate their recovery.
There will be a review. There will also be a mechanism through which employers can go to the Labour Court if they are unable to pay. That will be an additional burden, though, and I cannot imagine any employer risking not only the cost of going to the Labour Court, but also public ire in its community if it takes that route.
I would appreciate it if the Minister of State gave a commitment that his officials would examine this matter before Report Stage.
It may not be a rebate from Revenue. I quite like the idea that was put forward of administering it through the LEOs, which are in tune with our local business network across the country. They do well on the e-voucher schemes and other matters. That might be the vehicle by which to do it. For the benefit of businesses that are concerned but ready and willing to embrace this new legislation, assurance needs to be given beyond a long-term review process. Something needs to be enshrined in the legislation. Hopefully, the Minister of State will look at that and come back to it on Report Stage.
On the exemption from the obligation to pay this, the burden of proof is on the employer to show an inability to pay because it would jeopardise the business. There is nothing to be afraid of there in the context of public opinion; it is based on factual evidence. I am conscious that, for whatever reason, not everyone is aware it is in the existing legislation or uses it. The sick leave has to be certified and employers have asked, as an issue of fairness, that that remain in the legislation. Others have a view on that as well. That is the protection the employers need to know about because the majority of employers already look after people who are sick. It is important that the statutory sick pay scheme recognises this.
We can continue this conversation on Report Stage. We will look at it. We bore in mind the ways to reach out to companies that need assistance to protect jobs and their business. We do that on an ongoing basis. As I said to Deputy Bruton and others, we will track that between now and Report Stage and see if members want to strengthen the wording around it. As with any legislation that is brought in, there is always a post-enactment review. That is built in across the board. This is to strike a balance, as Deputy O'Reilly said, between people who are sick and feel under pressure to go to work and those who are creating those jobs. It is important that any reviews covers that. That is what we will try to do.
I move amendment No. 3:
In page 5, to delete lines 23 to 25 and substitute the following:
“(2) An employee shall be entitled to up to and including 10 statutory sick leave days in a year, or such additional number of statutory sick leave days (if any) up to 30, as may stand specified from time to time by order of the Minister under section 6.”.
I will withdraw the amendment on the basis that I want to resubmit it on Report Stage. We are trying to work with the Minister of State and encourage him to strengthen the Bill and have our vision of ten days stitched into the Bill. Otherwise, we would not be in a position to support the Bill on Report Stage. We will give the Minister of State time to work with us and his officials in order that when we get through Report Stage, we will have a better Bill.
Amendments No. 4 to 6, inclusive, are grouped and may be discussed together. Amendment No. 4 was tabled by Deputy Ó Ríordáin, No. 5 by Deputy Paul Murphy and No. 6 by Deputy O'Reilly.
I move amendment No. 4:
In page 5, to delete lines 30 to 32 and substitute the following:
“(5) An employee’s entitlement to a statutory sick leave day shall commence from their first day of employment.”.
We want to establish with this amendment that the employee's entitlement to sick leave commences from their first day of employment. The Bill as drafted will adversely affect a wide range of workers, including seasonal workers and special needs assistants. We want to ensure the entitlement is available from the first day of employment. If you are sick, you are sick.
My amendment does the same thing by means of a slightly different mechanism. This is an important issue. Workers should be entitled to sick pay from the moment they start work. The consequence of the requirement for 13 continuous weeks is the exclusion of many vulnerable workers. It will discriminate and disproportionately affect women, to a significant degree. The Irish Congress of Trade Unions, ICTU, has written to the Tánaiste pointing out that it: "will leave hundreds of thousands of mostly women and foreign-born essential workers employed in low-pay jobs, who routinely have their service broken by their employer, without coverage for three months each year." That happens all the time in childcare, for example, where workers, 98% of whom are female, are let go over the summer period and rehired in September. It will also massively and disproportionately affect young workers, more than a third of whom are on temporary contracts and will not be covered for the first 13 weeks. The basic point is that you are not any less likely to get sick when you are on a temporary contract or in an industry where you are laid off over the summer because your employer breaks your service. It is not your fault and there is no reason you should not be entitled to 100% sick pay from day one at work.
As has been outlined, the requirement for continuous service will, in effect, leave hundreds of thousands of workers outside the scheme. I raised the issue with the Tánaiste. I took, possibly from his body language rather than anything he said, that he was amenable to this and heard the concern about, specifically, workers in education. It is a tactic of employers to lay off workers to keep them on their toes, and there is no point saying that it is not. I am not referring to all or most employers, but some are doing it. The need for continuous service means one is continuously having to build service.
I am not hostile to the notion of a service requirement. It is done in other legislation but this effectively puts people, specifically women, workers on low incomes and foreign-born workers, as outlined by ICTU, outside of the scheme when they need the scheme more than anyone. There are likely to be working for small employers rather than multinational corporations so are likely to be working in a place without an in-house sick pay scheme. It is a bad start to exclude these workers from the beginning.
We had much debate on this matter during the pre-legislative scrutiny phase. There was toing and froing on issues like whether medical certificates should be required. Some felt that such certificates are necessary, even if good custom and practice would see that many employers do not always insist on them being produced. The one thing there was consensus on was that it is hard to justify saying a person's rights to sick pay should start some period into employment with a new employer. Sickness can strike anyone at any time, as we have seen during Covid. It does not seem to me to have a foundation to say the right should be deferred for a period. Probation is not about sickness; it is about reliability and other things. If someone is sick and has produced a medical certificate to show that, I do not see how not offering it from the first day is justifiable. Reflecting on the experience of Covid, it is important that people have the confidence that if they go in to work and are sick, they can get cover, particularly for the three-day period for which the State does not offer cover.
I am conscious that there was probably much discussion of this on Second Stage as well as during the pre-legislative scrutiny phase. I have asked Deputies to understand we need to address this as best we can. The 13-week service requirement is in place to ensure time is allowed for a relationship to develop. Most people will accept a relationship has to develop between an employer and employee before the employer is required or asked to pay for illness-related absences. It is not intended that employees who work for the same employers year after year will be required to repeatedly work 13 weeks before they can access sick leave. That is not the intention, and it will not be the case with the legislation.
We had significant discussions on Second Stage about the position of workers who work term-time type employment. Many Deputies expressed concerns that workers who are laid off over summer months will have to repeatedly requalify for statutory sick leave and routinely be left without protection for the first 13 weeks after returning to work.
Deputy O'Reilly read correctly the language used by the Tánaiste at the time. I think he also said that. That is not a situation he wants to continue with. I assure Deputies that a break in service caused by lay-off will not constitute a break in the employee's continuous service. This is by virtue of the linkage to the provisions concerning continuous service in the Minimum Notice and Terms of Employment Act 1973. However, we acknowledge that the position is less clear for employees who are employed on new contracts by the same employer, following the end of the previous contract, for which Deputy Murphy has pushed hard.
I confirm that it is our intention that successive periods of employment with the same employer should not give rise to a requirement to re-qualify. I agree this matter requires further clarifications so that employers and employees are fully aware of their obligations and entitlements.
We will table an amendment on Report Stage that will better clarify this issue. I am conscious the Deputies have tabled amendments on this matter but I ask them to hold off on them until we get our wording right, in conjunction with the Attorney General. Officials in the Department are working on the wording of an amendment in conjunction with the Office of the Parliamentary Counsel. As the amendment was not ready for today, we will bring it forward on Report Stage.
I recognise what members have said because they have pushed this matter today, during our discussion on Second Stage and during pre-legislative scrutiny. We will have this matter clarified. I hope members understand that we just did not have the amendment ready in time for today's discussion.
That is very welcome. I ask that when the Minister and Minister of State consider the amendment that they ensure the people who are intended to be captured in it do not have an additional requirement. Reference has been made to the need for a worker to be repeatedly employed. Let us say we stick with the 13 weeks, then a worker will end up with a 26-week requirement in a certain instance. Let us say a worker signs his or her first contract at the start of 2000 and qualifies after 13 weeks, then experiences a period of being laid off, then signs another contract at the start of 2001 and has a another 13-week period, that means that worker will have needed a 26-week period to qualify when another worker would only have a 13-week period, assuming that we stick with the latter period. If there is a service requirement, then it cannot be doubled only for the person who finds himself or herself in the precarious situation of having rolling contracts. I ask the Minister of State to keep that practical aspect in mind.
I hope to support the amendment but the result of it cannot impose an additional requirement on a person. We have already established these people are among the most vulnerable workers in the State and, therefore, the Government cannot make the period of 26 weeks or double whatever the service qualification is going to be. Of course, if the Minister of State accepts the amendments tabled by either of my colleagues, then he would not have that problem as employees would qualify from day one. If that is not the way the Minister of State is going to tackle this matter, then, if there is a service requirement, it cannot be double the period for someone on a low income.
To be clear, it is not the intention to impose additional requirements on anybody. The legislation covers the majority. We certainly do not believe the legislation will jeopardise hundreds and thousands of workers but we want to make sure it is right. To get it right, we need the correct wording. The wording has still not been agreed with the Attorney General. That is why the amendment was not ready for today. We want to get the wording right to ensure we do not put additional requirements on anybody and do not omit anybody. This matter has been well flagged by the members, which is the benefit of having a committee. We will get the wording right. If we had brought forward wording today, then it would have been rushed. I hope members trust me and accept my commitment that we will table an amendment on Report Stage.
That commitment is welcome. Let us assume we got the new amendment, it would deal with a part of the problem that concerns workers with the same employer but the contract has been broken, etc. I still think that there is an outstanding issue that has not been dealt with. Let us consider a pure and simple situation where someone is not going to have his or her service broken but starts work somewhere and is not entitled to sick pay for the first 13 weeks. The explanation the Minister of State gave is that the employee does not have a relationship with his or her employer at that stage. If one is a worker and a boss asks for something to be done in work, the worker cannot say to him or her that there is no work relationship yet. It is a contract, one must work, one is being paid, one is treated as a worker and one has all the responsibilities of a worker who has been in employment for more than 13 weeks but for some reason, we are arbitrarily saying this worker does not get the rights that go with his or her employment in terms of sick pay.
The commitment is welcome in terms of the issue the Minister of State is dealing with as it is a large part of the problem. However, I still think that there is an outstanding issue in that when someone starts work somewhere, he or she should still be entitled to sick pay.
I accept that is how the Deputy feels. Most legislation in this space, in terms of workers' rights or entitlements, here or across Europe allows time for a relationship to develop and does not automatically kick in on day one. Again, the employer will pay for this sick leave. It is important to recognise that a relationship of some sort of employment would be necessary before these entitlements would kick in and we suggest 13 weeks. Originally, the time was around six months but after the consultation, in conjunction with the members, and pre-legislative scrutiny done by the committee, the period was reduced to 13 weeks. In other legislation, the time is generally six months plus. We have made allowances and gone further than would be the norm in Ireland and across Europe, which I hope members accept. Again, we must strike the right balance and I hope people accept that.
I am happy to withdraw my amendment on the basis of the comments made by the Minister of State.
I move amendment No. 5:
In page 5, to delete lines 30 to 35.
Is the amendment being pressed?
I move amendment No. 6:
In page 5, line 31, to delete “continuous”.
On the basis of the commitment given by the Minister of State, I withdraw my amendment but reserve the right to resubmit on Report Stage.
Amendments Nos. 7 to 9, inclusive, have been ruled out of order.
Amendments Nos. 10 to 14, inclusive, may be taken together by agreement.
I move amendment No. 10:
In page 6, to delete lines 11 and 12.
These amendments amend section 6(1). I refer to the various things the Minister needs to take into account when deciding whether to vary the number of statutory sick leave days. As the Minister of State and people will know, we are against this whole concept in the sense that we think there should be an agreed number of days and we are in favour of no limit.
If there are references to what is being taken into account, then we propose the deletion of the reference to "the state of the economy" and "competitiveness" as consideration for a Minister in varying the number of sick days. Again, we think the worker's right to sick pay should not depend on the notion of competitiveness. Workers should not lose out as a result of the economy not being, supposedly, competitive. My amendment seeks the deletion of the state of economic sectors and the state of employers as considerations for the same reason. It also seeks to delete the views of employers. As the Minister of State will know, employers are not going to be in favour of increasing the number of days for sick pay. Again, we do not think there should be a reference to that. There is then the effect inflation has on the cost of living for employees. This is an extra pressure that is affecting people at the moment and should be taken into consideration.
I will speak to my amendment No. 11. Deputy Murphy identified some of the issues with this section. The section is very heavily weighted in favour of the employer rather than the worker, which is problematic. Let us start with the premise that sick pay is an important tool in protecting public health and that no worker should consider going to work if he or she is sick. The intention is to increase the entitlement but it is a little bit like the right that an employer has to say no to remote working. There are many reasons there will be no increase but there is not an awful lot in it to suggest that other interests, such as those that would be in favour of workers, would also be considered. When the Minister, or whoever it is, considers increasing the number or how that will be phased in, someone will always find an excuse not to do so. The current wording is very heavily balanced in favour of employers.
There is no consideration for society or the well-being of employees, which need to be factored in. That is in my amendment, that is, that the Minister of State would consider, "the state of society generally, the public interest and employee wellbeing". This is supposed to serve the interests of workers and of business. I do not know of many business owners who want their workers to come to work if they are sick. I do not know of many workers who want to go to work if they are sick. If this Bill is to serve the interests of both parties, as well as to balance the interests of both, then an amendment to this section is required. I do not think that it delivers. It gives too many excuses. That is not to say that future Ministers will be looking for excuses but if they were to do so, this is already laid out for them in the legislation. I would have a concern that this needs to be strengthened and bolstered to work for the interests of the workers, as well as for business.
I am sympathetic to Deputy O’Reilly’s amendment. Talking to unions and to employers, we could miss out on the experience we had in the pandemic, for instance, where there are wider issues that could be relevant.
I do not really agree with Deputy Paul Murphy’s amendment. If we are in an economic crisis, that is a relevant factor to be taken into account. However, a balance can be struck there with Deputy O’Reilly’s suggestion.
Amendments Nos. 10, 12 and 13 could disrupt the balance contained within the Bill that protects the rights and obligations both of employers and employees. To be very clear, if we wanted an excuse not to do this, there were plenty of excuses in the last 24 months and in terms of what is to be ahead of us in the next six or seven months. The Tánaiste still is determined to bring this legislation through the Dáil because he is committed to this and believes it is the right thing to do for the country. To say anybody would want an excuse is wrong because we are here today bringing forward legislation that is weighted and balanced in favour employees, employers and public health. I would not be recommending the legislation to the members if I did not think it was weighted and balanced correctly. It is not heavily weighted in favour of anybody.
We should also recognise that the employer is paying for this, and not anybody else. That should be borne in mind. The legislation is weighted fairly across the board.
It is a progressive Bill and it will ensure that all employees will have financial protection from day one of a medically certified absence. However, the Government does not want to jeopardise jobs by placing an unsustainable cost and administrative burden on business. That is why this is to be phased in over a period of time. The introduction of a statutory sick pay scheme must be balanced with the need to support the viability of the business and enterprise sector, thereby protecting the jobs that we all dearly cherish in this country. It is entirely logical that the Minister would have regard to the state of the Irish economy, of the business environment and of national competitiveness before adjusting the number of paid sick leave days provided for under this Bill. To do otherwise would be reckless and it could lead to unintended negative consequences.
In recent times, as Deputy Bruton just said, we have witnessed a series of unprecedented and unforeseen events that have had significant impacts on the global and Irish economy, including Brexit, the Covid-19 pandemic and the Russian invasion of Ukraine. These events are by their very nature unplanned. Their impacts may be more widely felt by specific sectors of the economy. It is only reasonable that the Minister of the day would take account of any economic shocks when adjusting the number of paid sick leave days that employers are required to cover. There is no sense in adjusting the number of sick leave days to a level that is unsustainable for businesses and that would lead to a loss of jobs. Nobody would win in that situation and nobody would want that. This is about what is fair and right for employees and for employers.
Certain sectors, particularly the retail, hospitality and caring sectors, may be more impacted by sick-related absences than others. We touched on this earlier on. From a cash point of view, employers would have to replace a worker in a customer service role immediately as they would not be able to absorb the work in other ways. These sectors may have the additional cost, when an employee is absent through illness, of paying for an immediate replacement. Ireland's body of employment rights protects all employees equally and we have always avoided the creation of subcategories of rights by sector. That is why we spoke earlier about business supports being handled in other ways through our business development agencies, and not in legislation that gives rights to workers. This is the correct way to do things. Rights should be universal and not by category when it comes to this situation. Yet, the corollary is that sectors which bear greater costs in respect of certain rights should be taken into consideration when new entitlements are being introduced.
Regarding amendment No. 11, these matters are already covered under subsection (1), which provides that the Minister may consider, inter alia, the state of the economy, the impact on employers and employees, the views of trade unions and any other matters the Minister deems relevant. This provides flexibility and allows the Minister to consider all relevant issues, in addition to those that are specifically mentioned under the Bill. Subsection (1)(e) was introduced in response to the recommendations of the Joint Oireachtas Committee on Enterprise, Trade and Employment’s pre-legislative scrutiny report on the general scheme of the sick leave Bill, which recommended that the legislation should provide for consultation with the social partners in relation to the implementation of its provisions. Hence, we have made that change. We took this recommendation on board and we included this requirement in section 6. We have taken a collaborative approach in developing this legislation and we wish to ensure that is fair to both employers and employees. We believe that this is the right approach, and we will continue to engage with both employer and employee representative bodies going forward. It would be unfair to consult only with trade unions, which amendment No. 13 would provide for.
The effects of inflation and the cost of living for employees are not particularly relevant matters when considering the number of sick leave days provided for under the Bill, although they are relevant right across the board at Government level. These issues would be more relevant when considering the minimum and maximum rates of payment. That is naturally something that we will deal with in the regulation.
I have two quick points. The first is that while everyone can say the word “balance”, but this is not some neutral thing. The balance goes one way or the other. I do not hide that I am trying to shift the balance in favour of workers, relatively speaking, against employers. To be clear, I think there should be compensation for small businesses. I am unashamed about that. There is not some abstract, floating-in-the-air, perfect balance that can exist. There is the question of weighing up which ones we think are more important here. In this situation, we think that what is presented is not enough for workers and that the interests of employers have too much weight, in terms of what the Minister will take into consideration.
My second point is a general one. It must have been said ten times now that it is the employer who is going to pay for this but where do people think the employer gets the money from? Who creates the wealth the employer will use to pay for the sick pay? All of the money comes from the worker at the end of the day. Where is the profit coming from that the sick pay is going to be paid out of? It is coming from the employee. There is this idea that the employer is just taking money from their personal wealth or elsewhere to pay the sick pay. This is a slight increase in wages and the worker is getting back slightly more of the value they are producing. However, they are still not getting the full value, which is why the employer will still make a profit. That is why I reject the idea that this is not ultimately coming from the employee as opposed to the employer.
I want to reject that as well. It is constantly being said that the employer is paying. We could equally say that they have not been paying for decades and that they have been getting away with it for decades. It does not need to be referenced in that way. For this to work, we must not come at it from the perspective of this being some kind of gift that is being bestowed on workers. Rather, it is an instrument of public health. I am worker, just like everyone else in this place. I do not want people coming into work if they are sick or to feel an obligation to come into work if they are sick. That has to be the starting point. There is this constant reference to the fact the employer is going to paying. There is, absolutely, but they have been getting away with it for years.
We need to come at this from a public health intervention perspective, which is what it is. I believe this is where this Bill has come from. When listening to members of the Government when they speak about this, they speak about the need for us to regard sick pay as a public health intervention. This is not an optional extra. This is not a gift that is to be given to workers. Nobody wants to be sick or to be off on sick leave. However, they want the comfort of knowing that they will not end up in the poorhouse just because they are sick. Equally, their co-workers want the comfort of knowing that nobody is going to be dragging themselves into work and infecting everybody else because they will have this safety net.
If we come at it from the perspective of it being in the public interest and public good, then I see no reason amendment No. 11 should not be accepted. It would tilt the balance back in favour of the worker because that is who need to look after in this instance.
In regard to employers who cannot pay, the Minister of State knows as well as I do that there is the same provision in the National Minimum Wage Act 2000 for employers to go to Labour Court. The very same employers who said that it would put them out of business and all of that are not going to the Labour Court. Therefore, maybe businesses are a little bit more resilient to absorbing these costs than we give them credit for or, indeed, than they sometimes give themselves credit for.
However, this is very much in the public interest and we should be coming at it from that perspective.
I support what Deputies O'Reilly and Paul Murphy said. This is a basic provision in employment law across Europe. The rhetoric from today's meeting is a little disappointing. I am referring to the onus on the employer. As Deputy O'Reilly quite rightly said, we have heard these arguments before in respect of wage increases, minimum wage increases, etc. Every employer group told us Armageddon would occur, but it did not happen. What we have been arguing for and trying to bring into law is a basic provision to prevent people from feeling they have to go to work when sick and so they will get paid to feed their children. These provisions are basics across Europe. Let us tilt the argument back to where it should be. It should be about protecting sick workers.
There is a genuine balance issue here. Other members are either not accepting or have forgotten the reality that obtains when an economy loses competitiveness on the scale that we experienced for a period. I am referring to the impact of the collapse of businesses into which employers have put a lifetime of work and to workers being left high and dry following the collapse of a business into which they have put a lifetime of work. Those are genuine considerations. Economies must not refuse to recognise that competitiveness is part of being successful and that enterprising people are needed. Getting profits from one's enterprise is not some sort of error; it is what allows an enterprise to be successful, export, win new business and create wealth for everyone to share.
The question of balance the Minister of State is trying to defend is absolutely authentic. Ireland has the history to prove it. We went through long years when we failed to recognise the importance of enterprise of competitiveness, and we paid dearly for it. We have succeeded over several decades, despite the financial collapse, in building a balanced economy that can provide opportunities to introduce legislation like this and do other things that we could not do for years. People have to be conscious that having a provision that implies the competitiveness of our businesses and economic climate is important in deciding what new obligations we impose or rights we create is just sensible. Trying to stick our heads in the sand and say it is not part of the balance that the Minister is obliged to strike is short-sighted.
I wish to follow on from Deputy Bruton's point on balance. I said at meetings of this committee before that I have a slight problem at times with some of the narration on employers. I believe it was Deputy Paul Murphy who said it is the employees who are creating all the wealth. Employers have to put the structures together for productivity to happen. There is a balance to be struck. I am certainly on the side of employees but we must remember what Deputy Bruton just alluded to: one has to be cognisant of what is going on in the economy. We are trying to do something now that we have not done before, namely, introduce a statutory sick-pay scheme for all workers. I welcome that but do not subscribe to the idea that we can just ramp up year on year without being cognisant of what is happening in the economy and the headwinds that businesses are facing.
To return to a point I made earlier, small and medium enterprises, which employ close to a million people in this country, are not being properly spoken for here. As public sector workers who get our increments, it is very easy for us to go into the Dáil and vote further expenditure into the pot to pay for the costs. That does not happen in the private sector; in the private sector, one has to try to create a business margin wherever possible. When margins are affected by increased costs, it is very difficult to combat. When the Government says one must take on increased costs again that will impinge upon margins, we have to be mindful that it is a competitiveness issue. We have built very efficient companies in this country because we are agile; however, when the public sector and public policy require new machinations for businesses that will add to their costs, it is a concern for them. We have to be mindful of that. Therefore, I believe that what is in the legislation, which is that the Minister must have regard to all the headwinds affecting competition and cannot just have a statutory increase of two, three or four days year on year, represents sound business and fiscal policy.
I have a couple of observations and comments. We are not opposing Deputy O'Reilly's amendment but saying it is covered by the existing wording. She will recognise that herself. We have made changes on foot of this committee's recommendations before.
Deputy Paul Murphy wants to exclude employer representative bodies. He is asking for the provision in this regard to be deleted. I could not condone that; that would be illogical. We are trying to bring forward legislation that is balanced. The Deputy said he is a champion of the employee and takes credit for that, but our job in government is to strike a balance and ensure there are jobs for employees. It is a two-way approach.
I do not apologise for acknowledging that employers will have to absorb the cost. It is a public health measure. It will protect everybody and gives sick workers the option to stay at home rather than going to work because they cannot afford not to. That is what the legislation is being introduced for. Employers do not pay for such a scheme at present but they will be paying for it. We have to recognise that, and I do not apologise for doing so.
We all agree that it is appropriate to introduce a statutory sick-pay scheme. Most employers I talk to acknowledge and accept that, as mentioned by Deputies Shanahan and Bruton, but they recognise they are trying to run businesses with massive costs and that have seen cost increases over the past couple of years. Employers accept these schemes if they are fair, reasonable and manageable and if the cost can be absorbed over time. We are trying to introduce the scheme over several years to allow employers time to adapt and, in some cases, change prices. However, they have to remain competitive. I sat with Deputy Bruton across the road back in 2011 and 2012 when we had an unemployment rate of 16% or 17%. Everybody you spoke to wanted a job. Of course we all want jobs with good terms and conditions, and we are constantly striving to have improvements in this regard, but we also want employers to create those jobs, take the risk, have the ambition to go further and take on international markets. However, they have to be competitive to do that.
Profit levels vary from business to business; there is no doubt about that. Some employers make great profits while others just barely cover their costs and pay their own wages. We have to recognise that. This legislation will apply across the board for all employers. For a small shop on the corner employing 20 people, this legislation could add a cost of €5,000 or €6,000 per year. We have to bear that in mind. Prices may be passed on, profits may be reduced, and affected businesses may become less competitive. There is a combination. We are trying to introduce legislation that is balanced for everybody and introduces good pay and conditions and a statutory sick pay scheme that is needed and recognised. We are an outlier in Europe – no one is denying that – but it is a matter of bringing in the scheme in a phased way that is manageable for everybody and does not jeopardise well-fought-for jobs. Everybody here, across all Departments, has worked to create an environment that is conducive to job creation. We must recognise that at the end of the day, the cost proposed is an additional one and that it will be imposed in a few months when we finish this work. We must also recognise that the majority of employers want to do the right thing by their staff. In the majority of cases, they do that and accommodate sick pay schemes or other informal arrangements at their own expense. However, the Bill proposes a statutory scheme that will have to be implemented across every place of employment. The balance is right. I disagree with Deputy Paul Murphy that we should delete the reference to employer representatives. That is totally imbalanced. We are trying to achieve the right balance here.
I agree with several of the speakers, including the Minister of State, that this Bill is very much about balance. There has to be balance in this. I remember my late mother telling me that if I wanted to find out how popular I was, I should go into politics or open a business. I would sooner be in politics because it is very tough trying to run a business at the minute. We have to accept that every action has a consequence. The approach of the legislation, with its slow building of momentum and its addition of days over time, is the way to go. It has to be inclusive and involve employer groups throughout.
I will come back to the point I made earlier on the ability to pay and having recourse to the Labour Court.
No small business owner will ever do that because if one were to take that action, the first thing that would happen to him or her is that any limited credit that he or she would have, be it 30 days or 28 days, would be withdrawn from him or her straightaway because it would raise red flags with his or her suppliers. There is not sufficient recourse there for employers. Hopefully, on Report Stage, the Minister of State can come back with an alternative for us in order to compensate employers.
Does the Minister of State want to come in again?
I am sorry, Chairman, I thought I covered it already.
In response to Deputy Flaherty, I recognise the pressure businesses are under. I recognise the mechanisms. If one uses the clause that is there under exemption, there are the consequences. To respond to Deputy Paul Murphy, it is not to say that businesses cannot have their profits reduced. It is that the business is not sustainable if it pays this out, and would not survive and it would put jobs at risk. Nobody here wants to risk the jobs. We all want to increase the number of jobs. It is great that this country has had a jobs-led recovery. Of course, we want good terms and conditions and to constantly improve that as much as we possibly can, but not to put jobs at risk.
This is a statutory pay scheme. It is about rights across all sectors. Business supports and supports to different businesses are dealt with elsewhere, but we will try to capture what Deputy Flaherty and others are asking on Report Stage in order to recognise that too. However, it is built into the reform mechanism.
In terms of supports, such as job supports, we do not deal with them in statutory rights legislation. However, I accept what Deputy Flaherty is asking me and I will try to deal with it more on Report Stage. It is ongoing work we do through the local enterprise offices, Enterprise Ireland, IDA Ireland and many other organisations supporting jobs. Even with Pathways to Work through the Department of Social Protection, we encourage and work with employers to give people a chance to work and to retrain, etc., across many Departments. They are job supports in many other ways. I will track that.
As I said, we recognise that some businesses will feel under pressure to absorb these costs over the next couple of years and that is why we are trying to get the balance right here. That is why the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Varadkar, has led on this and that over a four-year period, not straightaway, we will increase it up to ten days.
I move amendment No. 11:
In page 6, between lines 12 and 13, to insert the following:
"(b) the state of society generally, the public interest and employee wellbeing;".
I move amendment No. 12:
In page 6, lines 14 and 15, to delete "the economy generally, specific sectors of the economy, employers or".
I move amendment No. 13:
In page 6, line 20, to delete "employer representative bodies and".
I move amendment No. 14:
In page 6, to delete line 21 and substitute the following:
"(f) the effects of inflation on the cost of living for employees.".
I move amendment No. 15:
In page 6, line 22, to delete "The order first" and substitute "An order".
This is an amendment to ensure that the number of sick days, as it is changed as it goes on, can only be increased as opposed to decreased on the basis of developments. We should come in with the number of sick days that are required but if we are to have a situation where it changes over time, it should be a one-way street where there is not a possibility of any backsliding and reductions over time.
Subsection (2)(a) provides that the first ministerial order made under the Bill will not reduce the number of statutory sick leave days. Subsection 2(a)(i) provides that no ministerial order will reduce the number of statutory sick leave days below three. This means that once the Bill has been enacted and commenced, the number of statutory sick leave days can never go below three. Earlier, I explained where the three came from.
The effect of this amendment would be that the number of sick leave days provided for could never be reduced. This would mean that the Minister of the day would have no ability to respond to emergencies or changing circumstances, such as we have seen in the past couple of years. There are currently no plans to reduce the number of sick leave days provided for under the Bill. The Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Varadkar, and the Cabinet have been clear about the intention to move to ten days over the next number of years but it also makes sense to provide the Minister with the power to reduce the number of days, if the entitlement was deemed to be unsustainable. That is only fair and proper legislation to bring forward.
This flies in the face of the assurances the Minister of State is giving us that we are going up to ten, that there is no problem and that this all has to be here but the Opposition should not worry as this will happen barring extraordinary circumstances. Why not have a one-way ratcheting system?
At present, it is the first order. We cannot go below three days but, apart from that, we could go up to six days and then go back down to three days on the basis of competitiveness or the views of the employer representative groups.
The Minister of State said that we would not have the flexibility. Actually, there would be flexibility in the sense that legislation could be brought in to say we have an emergency situation. I accept it would be up to the Government to get a majority in the Dáil but what the amendment removes is the ability of the Minister to decide we are to reduce the number of sick days.
Even in the spirit of us starting at three days but going to ten days, people who have paid even a little attention to this would presume this is a one-way street and we cannot go up and down again and that if we are serious about going to ten days and then beyond ten days, it should only go in one direction. If the Minister of State wants to make an emergency exceptional case, he should come forward with legislation and seek a majority in the Dáil for it as opposed to simply leaving it in the hands of the Minister.
We have been clear we are trying to get the balance right and to recognise that at any given time the Minister or Government of the day must have the power to increase or reduce the number of days. What we are trying to create here is good quality sustainable jobs but one must be able to react to the situation.
The Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Varadkar, and the Government is clear about what we doing. Deputy Paul Murphy talks about Dáil support and that applies to any side of the argument here. We have laid out that the commitment here over the next four years is to go to ten days. The legislation starts that process, brings in a formal statutory sick pay scheme and sets a minimum floor on that. We intend to build on that as well but we believe that needs to be left up to the Minister and Government of the day.
It is only right the Minister should have flexibility. We are talking about balance. We are talking about the ability of businesses to change direction and change tack. It would be sending probably an incorrect signal to business saying that we are putting in some ratcheting system that, regardless, will move on.
I will not be supporting this amendment. The tone from Government is correct. It has signalled where it is going but the Minister must be able to reduce it, if needed. However, I do not think it will be needed.
In general, it reflects the approach that has been working quite well for the minimum wage over the past number of years which has seen ten increases recommended to and accepted by Government. That legislation does not set out at maximum. We believe we have to give the Minister the ability to adjust to or accommodate what is in front of him or her.
I move amendment No. 16:
In page 6, line 27, to delete "3" and substitute "10".
I am withdrawing it on the basis I will engage with the Minister of State and the Department. Hopefully, when it comes to Report Stage, we will have a better Bill. I am withdrawing the amendment on that basis, in order to resubmit it on Report Stage.
I move amendment No. 17:
In page 6, to delete lines 29 and 30.
I move amendment No. 18:
In page 6, line 29, to delete "3" and substitute "10".
I move amendment No. 19:
In page 6, to delete lines 31 to 35.
This amendment proposes to delete the following part of the Bill:
(c) The Minister shall not make an order—
(i) to which paragraph (a) applies, before the expiration of 12 months after the commencement of section 5, or
(ii) to which paragraph (b) applies, before the expiration of 12 months after the commencement of the immediately preceding order under this section.
It proposes to get rid of the 12-month element of the Bill. The Minister should not have to wait 12 months before improving the conditions of workers.
I recognise that what Deputy Ó Ríordáin is trying to achieve is to remove the 12-month element. He has been clear about this. Section 6 provides that the Minister will not make an order adjusting the number of statutory sick leave days under the Bill until 12 months after its enactment and that a period of 12 months must pass between each subsequent adjustment. The amendment would remove this provision and place no restrictions on how often the number of sick leave days could be changed. Limiting adjustments to once every 12 months provides employers and employees with a degree of certainty about their entitlements. Once enacted, employers will know in advance of each year what their obligations are on statutory sick leave and what they have to plan for and accommodate. This will allow for better alignment with contracts of employment and tax responsibilities. The limit on adjustments will also allow the Minister time to reflect on the impact of any previous change. Everybody is requesting that we do this on a regular basis. It is important that we give people time to be able to implement changes, and 12 months is a reasonable period.
I respectfully disagree.
Amendments Nos. 20 to 24, inclusive, will be discussed together.
I move amendment No. 20:
In page 7, line 4, after "day" to insert "equivalent to 100 per cent of an employee’s pay".
This amendment and the others in the group would increase the level of sick pay to 100%. They propose to get rid of the arbitrary 70% up to €110 per day, which is what is contained in the Bill. Many of the workers that will be affected by this are minimum wage workers who would be getting less than €110. In many European countries the standard is 100%. There is a very good reason for this, which is that people have built their lives and responsibilities, such as repaying mortgages and buying groceries, around a certain level of pay. We do not think they should be arbitrarily reduced from this level on the basis they are sick. There is still a clear public health argument for sick pay. If people's pay will be reduced there will still be a pressure on them. They may feel they cannot get by on 70% of their pay or €110 a day. There will still be a certain pressure on people feeling they have to go to work to get the full 100% because they rely on it for their mortgage or energy bills, particularly with prices increasing.
The Minister of State needs to look at the burden in this. While an element of paid sick leave is welcome and a statutory sick pay scheme is long overdue, and we have discussed this, it cannot exclude people because they are on low incomes. They will have to put their hands in their pockets to go to the doctor. I tabled an amendment that would have eliminated this until such time as we have free and universal access to GP care. We do not have this, and we are a good bit away from it. I respect that it is an ambition of the Government but we are a good bit away from it. Not only will low income workers get 70% of a very low income, they will also have to pay out a higher proportion of that income to be able to access the sick leave scheme. I am conscious of anything that will act as a barrier for those workers on low incomes.
I am sure the intention is that this will have equal application for all workers. In practice there are barriers and the burden is too high. People will get a reduction in their wages when they are already on low incomes because they had to take some time off sick. They will also have to pay to go to see the doctor. There is time between now and Report Stage to reflect on this. I ask the Minister of State to reflect on the impact on workers on low incomes. How likely are they to avail of it if there are a number of barriers in their way? There is also the return they would get during the time spent off work. We have to add to this the cost of going to the doctor. The Minister of State knows that things are tight for people on low incomes and that every shilling is accounted for. We cannot have a situation where a worker says he or she cannot afford to be sick. The intention of this is that a worker who is sick has a safety net. It is low income workers who are facing this. We have heard the phrase "the double whammy". We have all received correspondence on it. This is a doubled whammy for a low-income worker.
A reality of Irish life that people often forget is that we have a low-pay economy. A total of 23% of Irish workers are on low pay. We have the third highest proportion of low-paid workers in the OECD. People in Ireland are paid poorly. We do not have the same basic state provision of GP visit care as other European countries. The two elements that make the Irish context different are the number of people who are poorly paid and the poor provision of basic public services such as GP visits.
If people get sick it will cost them money. It will cost them to go to the doctor and to get whatever the doctor prescribes. It may make more sense to people to pretend they are not sick and to go to work. The Minister of State has to get into the mindset of poorly paid workers. A disproportionate number of them are women. They will have to make this choice. They may decide they cannot afford to take the dip in their wages as outlined in the Bill because of the costs they will have to incur in attending a GP and purchasing medicines. We have to have a sympathetic Act that protects workers who have to make this horrible choice so we do not have in the workforce people who feel they have to go to work when they are sick as otherwise they could not pay bills or feed their children. I ask the Minister of State to respond to this. We have a pandemic of low pay in the economy. This is a recognised fact. We also have the cost of being sick in Ireland, which is much higher than anywhere else in Europe.
I have some sympathy with what is trying to be done in the Bill. This speaks to low-paid workers, and Deputy O Ríordáin has highlighted the fact there is no opportunity for them. They have to pay to get medical certificates. This is a problem. On the other hand, we have the problem with the employer. Small employers have to pay 70% of the rate and probably have to find replacements. This speaks to the need to find a way to shore up the costs of the scheme, particularly for SMEs. It also relates to some large employers that use low-cost pay. I am not sure what we can do about that. It is more to do with employee law. This speaks to trying to find some way to mitigate costs where employers would be happier to pay if they were getting a subvention. They would be happier to pay lower-cost workers a higher amount for being sick. It might also cover their costs. Again, this highlights the need for a review of where the Bill is going.
There were two issues there. Deputies O'Reilly and Ó Ríordáin raised the issue of medical care and GP costs. That is a public health discussion.
There are targets set and commitments made by the Government. I am sure that others will also make commitments to be able to reduce the cost of attending a GP and to reach those people who are vulnerable or on low pay. That is one part of it. We will see steady series of improvements that will reduce the costs for the low paid or those who have difficulty accessing GPs. That is one aspect.
What we are trying to achieve here is a minimum-rate entitlement. It is also to ensure that all workers receive a reasonable level of financial compensation. We are trying to get the approach right in order that we are supporting both the worker - that is, the employee - and the employer, get the balance right and recognise the cost base and the pressures people are under as we bring this scheme in.
There was mention of what is happening in other EU countries. In most EU countries, the replacement rate for an employee who avails of paid sick leave is set at a percentage of the employees normal wage. It is quite common to have a percentage. It is not the norm that it is 100% everywhere. We need to bear in mind not only what is happening across Europe where these schemes work and work well but also the position in the countries that we compete with when it comes to job creation and business. The range is from 25% at the lower end to 100% in some instances. The figure of 70% is in line with many European states, including the Netherlands, Croatia, Bulgaria and Estonia, and is greater than that offered in, say, Spain, Lithuania, Slovakia and the Czech Republic. In the UK, the amount is £96 or £97 a week.
They have free GP care.
I acknowledged that at the start. I am just quoting the rates that are in place around Europe. Ours is set at 70%, which we think is a reasonable balance. The Minister is very clear on the medium-term plan which is to set the rate at 70% of basic pay, capped at €110 per day. It is to ensure that employers know what their obligations would be and they know that the percentage is linked to the average wage.
Amendments Nos. 20, 21 and 23 set the rate of remuneration at 100% of the employee's basic pay. Our approach is to support both worker and employer. It is the Government's view that a 100% rate would impose excessive costs on employers in certain sectors, particularly those that have to deal with the costs of immediately replacing a sick employee. We need to recognise that is often the SMEs that we are in here trying to support and that we talk about every day who need additional supports. It is about getting the balance right that this scheme is manageable and doable and that employers can take it on because they do want to look after their staff as best as they possibly can.
As with all employment rights, the legislation is intended as a floor-level protection and will not prevent employers offering better sick pay terms or unions negotiating for more through a collective agreement or putting in place other arrangements around certification of sick pay. Some operate at the moment.
I am asking the Minister of State to take on board the concerns that were raised, particularly in respect of low-income workers, and do the maths regarding someone who is, for example, on the minimum wage or €13 per hour and how likely it is that they would have €55 or €60 to go to a doctor and then take that out of the 70%. I ask that he please do that exercise and consider whether that would be an attractive option. "Attractive" is the wrong word, but he should ask if there would be too many barriers in place. If he does the maths he would see that the money that will be taken out, particularly to pay for the visit to the GP. And we are talking about people who maybe do not go to the GP when they need to because money is a factor. You are asking them to take that money out of a reduced take-home pay, in effect. The Minister of State might think about that in the absence of availability of free GP care. He cited all the European rates. I understand that it varies, but the other supports available in those countries also vary except where it comes to access to free GP care. We are very much an outlier in that regard. I respect the fact that it is an aspiration of the Government to bring it in at some point but it is not here now.
I ask again, therefore, that between now and Report Stage that the Minister of State does those simple maths and has a think about the matter. This does act as a barrier. All of us acknowledge that for this to work as a public health tool, it has to be as accessible as possible. I do not think that it is specifically for those workers on low incomes with those two things coming together, that is, the 70% income and the necessity of paying a GP. It places a burden on the worker. I will say it again: no one wants to work in a place where people feel that they have to come in when they are sick. That is not the intention behind this Bill. In order for it to work, it has to work for all workers including those on low incomes.
I agree that it has to work for all workers. It is particularly targeted at those in the lower-paid sectors where, according to research, there are no sick pay schemes. All that was borne in mind when we set the 70% rate and the €110 maximum. We did take all that on board. We tried to go as far as we thought was reasonable in order to protect jobs. We recognise that this will increase the cost base of employers as well. I know what the Deputy is saying. Some of the countries I mentioned have different health mechanisms but, equally, the very lowest-paid and part-time workers in this country are more likely to have medical and GP visit cards. It is necessary to go further to improve that, but it is outside the scope of this Bill. It is a public health matter for the Department of Health, but there are commitments from the Government. Others can make commitments to the same level if they wish and back it up with finance. We have made our commitments and will continue to deliver on it. It is important that we do that.
This legislation recognises that as of today there is no statutory sick pay scheme and those people are extremely vulnerable today because they get no income support for one, two and three days. This Bill will change all that. They will get support. I accept that it is set at 70% and capped at €110 a day but we think that is a major improvement and removes a lot of barriers that are there today and discourage people from staying at home when they are sick. It is a major improvement. People can come in here and argue both sides. They might argue that we are going too far or that we are not going not far enough. We believe that at 70% it is a major improvement and gives the majority of workers a reasonable level of financial compensation for the days that they are sick. Today, in the early days of sick leave - days one, two and three - workers gets no compensation whatever and they are not discouraged from going to work. That was very evident during Covid. It goes back to balance. I totally accept that the Deputy is genuinely making the case. I know that, but we have to get the balance right in order that we do not jeopardise jobs.
We absolutely accept that this Bill will improve things. It should not be left unsaid that this is a welcome move by the Government. We are working constructively to try to improve it. However, it is a hell of a thing to worry about getting sick if you are in a low-paid job and you are genuinely terrified that you might be unwell because you cannot afford to be unwell and therefore you might hide that sickness and go to work because you cannot afford a dip in the wages or the costs that you would accrue for attending a GP. It is a hell of a thing to be that worried, looking at your children or at your bills and knowing that you just cannot afford to get sick. That is why we are bringing forward these amendments. Our fear is that this may be an underutilised provision because people just do not feel that it protects them enough so they go to work sick, hiding their sickness, pretending that they are okay, coughing in secret, telling people they are fine if they are asked, because the protections that are being brought in for them will just not work. Over a period, we may find, through the Department's analysis, that it did not work for the people that it needs to work for most. Those are the low paid, vulnerable workers in insecure work often exploited, who are disproportionately women, migrant workers and young people. We should, therefore, be trying to eliminate the fear in a household or a that person. That is why we put forward these amendments. I absolutely appreciate that employers have fears about their businesses but we live in a country with a low-pay epidemic and one which does not provide basic healthcare in terms of free GP care that other countries just take for granted. That is why we feel so strongly about these amendments.
We had a discussion on the accessibility or otherwise of the proposals. The absence of access to free GP care was cited by Dr. Laura Bambrick of ICTU during the pre-legislative scrutiny phase.
She made the point that very few people who are working have access to GP cards or medical cards. This means that here is a significant cohort of workers involved. I again ask that the Minister of State do the maths, put himself in that position and consider whether he would be able to take the hit.
The purpose of this is to ensure that people have the comfort and security of not going to work when they are sick. For a person on low income, it is the two things together - the 70% plus the GP care. My amendment, although it was ruled out of order, would have delayed the need for the medical certificate until universal access to GP care is available to all workers. If people are on low income and they are hourly paid, the chances are they will be looking for all the overtime that is going in order to supplement that. It is only 70% of the basic, although I accept that is entirely the norm in other states as well. However, the countries that the Minister of State is comparing us with also have GP access. It is the combination of the two things together.
I do not believe it is intended to put unnecessary barriers in people's way. This is definitely welcome. The provision of statutory sick pay is important, but it is also important that it applies to all workers. As the Minister of State said, the specific intention is that low income workers would be encompassed by this but I think the barrier might be too much. I ask that this is looked at before Report Stage.
Pressing these amendments is creating a different logic, which is basically that the problem that has been identified is access to medical certificates. We are saying that for low-paid workers and those who do not have a GP card, ultimately, they have to pay, if they can see the GP on the day they are sick, by the way, which is a significant problem in itself. On Report Stage, the Minister of State will have an opportunity to consider something different and along the lines of what Deputy O'Reilly is proposing. However, I do not feel it is fair to ask employers to pay 100% or pay for the lack of some mechanism whereby people can get access to a sick certificate, if that is what is required. That is basically what we are saying in a roundabout way.
I want to be clear. We have done the maths on this scheme and we have come in at a figure of 70%, which we believe is fair and reasonable. I do not want to give the impression that we are going to go away and come back on Report Stage with an increase on that because that is not the intention. As with every discussion we have here, we will reflect on it, we will talk to the Tánaiste and to our officials and we will work through this. However, a lot of work has been done to achieve that target of 70%. I did not say it is the norm across Europe to have 70%. In many cases, it is a lot less and goes down as far as 25%, although I accept it is higher in some cases. I am not saying that the norm is 70%. We are above the norm or above the average. We have put forward a reasonable proposal.
It is set out in regulation, for the reasons I laid out at the start. That gives scope to the Minister to react and to adjust accordingly over the years, as opposed to having to bring in primary legislation, which can be very time-consuming. That is there as well.
We share Deputy Ó Ríordáin’s understanding and concerns and that is why we are bringing forward the legislation. As a Government, we understand both the barriers that are out there and the necessity for this. That is why we are proposing it and bringing it forward, with the support of the Deputies. We are in tune with what is happening out there as well. We think we have the balance right on this, and we will monitor the position in that regard. It goes back to the balance and the costs that we put on employers because they also have to be able to balance their books and to survive. We want to have as many jobs as possible. We want people who are on low pay to be able to constantly aim to get a job, improve their job and build on their terms and conditions, if that is what they want to do, in order to be able to pay their bills and look after their families. They should not have that fear that I know is out there, which is “If one of us gets sick tomorrow or next week, how do we manage and how do we pay the bills?” That is why it is important to have good-quality, well-paying jobs with good terms and conditions. For that to happen, we have to have a balanced enterprise environment to manage that and to create those jobs in the first place.
It is a chicken-and-egg situation, but we will check and monitor this. It is in regulation that the Minister of the day can adjust this through regulation, as opposed to having to go back to primary legislation. However, I do not want to give the impression that we have not done the maths and that we are going to run out and change it, and then come back here on Report Stage. That is not the intention. It is linked to the average wage. We think we have the balance right. As I said, naturally, we will at every stage review what we are doing and keep an eye on that. However, that is where our homework has brought us to at this moment.
I move amendment No. 21:
In page 7, line 4, after “day” to insert “which shall be their full daily rate”.
I will resubmit this amendment.
I move amendment No. 22:
In page 7, to delete lines 5 to 19.
I move amendment No. 23:
In page 7, line 8, after “pay,” to insert “which shall be 100 per cent”.
I will resubmit this amendment.
I move amendment No. 24:
In page 7, to delete lines 10 to 13.
I will resubmit this amendment.
Amendment No. 25 has been ruled out of order.
Amendments Nos. 26 and 28 are related and may be discussed together.
I move amendment No. 26:
In page 11, line 22, to delete “20 weeks’ ” and substitute “2 weeks’ ”.
Amendments Nos. 26 and 28 amend the maximum penalty that the Workplace Relations Commission or the Labour Court may award for an employer's breach of the obligations under the Bill to two weeks' remuneration. This is to bring it into line with the protections afforded to other types of leave, where the level of penalty is approximately in line with the duration of the leave concerned. In considering these amendments, I thought it particularly notable that the amount of leave set out in the Paternity Leave and Benefit Act 2016 is two weeks, and the penalty for non-compliance is two weeks' remuneration. As the amount of sick leave intended to be provided for under this Bill will rise to two weeks over the next few years, it seems appropriate and proportionate that the level of penalty be set at that two weeks' remuneration.
There has been a lot of discussion today about balance and now, on Committee Stage, the Minister of State is decimating, literally cutting by 90%, the penalty for the employer. In terms of the balance of risk and reward for an employer not abiding by this legislation and not providing the sick pay required, and the employee having to go through all of the steps to prove that and then get a judgment, a penalty of two weeks' remuneration is extremely minimal. The danger is that some employers, though not all, let us be clear, will decide that is a risk worth taking. Even if they get caught out, it will only be a penalty of two weeks' remuneration. That is very small, and I do not think it is in line with the idea of balance. Surely there needs to be a considerable penalty to discourage attempts to evade or not implement this legislation, and not give workers the sick pay rights that we are talking about. It is quite a serious change that I would be seriously opposed to. I would press the matter to a vote in this regard.
I would also be very strongly opposed to this. I respect the need to remain within the boundaries of other legislation and so on, but this makes it a risk worth taking not to grant it. All of the discussion we have had today is centred around recognition of the need for this, but it has to work. Deputy Bruton described the draconian process that an employer has to go through to go at the Labour Court but it is the same for the worker, and it is a lot of energy and effort that they are going to have to put in to be able to take a case. Doing so takes a long time. If people are doing it on their own and they are not in a union, it is very arduous. Given there is a cap at the end, someone's boss might say it is worth the risk. The punishment should not just be in terms of restoring to the worker what they would have had.
It should also act as a deterrent for employers – not all employers, not even most employers, but we do not need to legislate for good and decent employers who are doing the right thing anyway. We would not be here talking about this if there was no need for it. We need to legislate for workers potentially being denied this leave where they are entitled to it. It will take a long time for them to vindicate their rights through the procedures, especially if they are doing so on their own. I would encourage people to join a union, which is the best way of going through these procedures anyway.
There needs to be a deterrent for employers. Cutting the period by 90% is excessive. I appreciate that it is not technically a cut, given that it is not in place yet. I should have chosen my words better and the Minister of State would be right to correct me on that.
I was going to.
That is fair enough. The original proposal was 20 weeks, but now it is two. That is a 90% reduction, albeit a reduction in something employees did not have. In this case, though, I do not believe that we can say that you never miss what you never had. This will be missed. There has to be some element of a deterrent. As matters stand, it is a risk worth taking.
One could see some cases where it was an oversight, error or the like and the worker was compensated by the amount that should have been paid, but if this is a deliberate attempt to avoid responsibility, there ought to be a penalty that is not just making up for what was lost. I would have thought that some level of discouragement or penalty was reasonable and that the worker who was denied his or her rights would have the opportunity to see that done. An adjudication officer might decide that different amounts are payable in different circumstances, but to deny the adjudication officer the opportunity to call out unacceptable behaviour does not seem right.
The Deputies have made a fair point. The ambition was to deter people. We might have gone too far with the 20 weeks, but I take the point that setting it at two weeks might be too low. We will reflect on this matter to see if we can get the balance right. We ended up on two weeks after tracking penalties in other legislation. This period is approximately in line with what the offer was. We are committed to a maximum of ten days of leave, which is two weeks. Even though it will take four years to get to two weeks, I accept the point that some employers might decide that the risk is worth taking. I will consider this matter and revert to members. We believed that 20 weeks was probably excessive and not in line with the magnitude of the offence. The intention is to reduce that. I will take members' comments on board and re-examine the matter with my officials and the Tánaiste.
We were discussing a balance. Going from 20 weeks to two does not seem balanced. We are trying to implement a scheme that nearly all employers will abide by, but for those that do not, there has to be a sanction. Two weeks is not an adequate sanction. I welcome that the Minister of State will revert with something more robust.
We looked at other legislation. Where paternity leave is concerned, it is two for two. There is an entitlement to 26 weeks of maternity leave and a 20-week penalty. That is why we lowered it to two weeks - to reflect what was common across other legislation. The Deputies will accept that 20 weeks was probably disproportionate, but we will consider the matter and revert to members.
Is the Minister of State withdrawing the amendment?
I will withdraw it for now and revert on Report Stage.
Amendment No. 27 has been ruled out of order.
I move amendment No. 28:
In page 11, line 28, to delete "20 weeks' " and substitute "2 weeks' ".
Is the amendment being withdrawn, with the proviso that the Minister of State will revert to us?
I will withdraw it for now. To be clear, we will recommend some change on Report Stage. I hope to get a figure on which we can all agree.
I thank the Minister of State and his officials for attending.
The Minister of State has alluded to how, on Report Stage, he will look into providing support to small and micro-sized enterprises. That would be welcome.
I thank members for participating in today's meeting under exceptional circumstances due to Covid-19.