In a decision from the Workplace Relations Commission (“WRC”) in Ann Britton v Amcor Flexibles Ltd (ADJ-00050138), the Complainant sought sick pay under the statutory sick pay scheme (“SSP scheme”) for five days certified absence. The Respondent contended that she was not entitled to the payment as the company sick pay scheme (“CSP scheme”) overall was more beneficial and on that basis the Complainant had no entitlement to payment under the SSP scheme. This assessment was not accepted by the Complainant, and she submitted a complaint under the Sick Leave Act 2022 (“The 2022 Act”).
Facts: The Complainant commenced employment with the Respondent on 20th April 2023. The Respondent operated a CSP scheme, the details of which were given to the Complainant on her commencement and outlined in her contract. The CSP scheme provided that, following 12 months service an employee may be paid sick leave of up to ten days once a medical certificate was provided on the third day.
In the third and fourth year of employment, this would increase to 15 days and 20 days in the fifth year. In the first two weeks of absence the employee was entitled to basic pay plus a shift premium, while after two weeks the payment reverted to basic pay.
In January 2024, the Complainant was on certified sick leave for five days. The Complainant did not have the 12-month service requirement to qualify for the CSP scheme.
The Complainant was also informed that she would not receive any payment under the SSP scheme as the CSP scheme was deemed more favourable overall. The SSP scheme at that time provided five days sick pay over a twelve-month period, at a rate of 70% of normal pay up to a maximum of €110. The leave had to be medically certified and was payable from day 1 of absence.
The Adjudicator Officer, Janet Hughes, stated that the issues to be decided were whether by application of the tests contained in the 2022 Act, the Respondent was correct in its response to the Complainant that the CSP scheme overall was more favourable than the SSP scheme. On that basis the Complainant would not be entitled to any payments from the SSP scheme.
The Complainant submitted that she should have been paid under the SSP scheme in January 2024. She stated that she was also unable to seek any Illness Benefit from the Department of Social Protection (“the Department”), as a person cannot apply until the 6th day of illness, the first five days being described as waiting days.
The Complainant submitted that the Department did not pay her illness for that period as she was to receive statutory pay from her employer. The Complainant also received confirmation from the Department of Social Protection on this after a request from the AO in July 2024.
The Complainant provided detailed calculations in her submission, in relation to the payments she could receive for illness absences of between 5 – 10 days. She submitted that between the SSP scheme combined with the social welfare illness benefit would be more favourable than the CSP scheme which also had a three-day waiting period. The Complainant also submitted a breakdown of employees with service of less than 12 months service and those with less than three years, after which point they would receive 15 days sick pay.
The Respondent submitted that their payment terms were far superior to the SSP scheme. At the hearing the Respondent referred to the overall wage profile of their workforce, stating that many employees were on higher rates of pay than the Complainant and receiving payments far in excess of the SSP scheme.
The Respondent compared the CSP scheme to the SSP scheme under the various factors to be taken into consideration as set out in Section 9 of the 2022 Act.
| Section 9 Considerations | Company Sick Pay Scheme | Statutory Sick Pay Scheme |
| Period of service of an employee that is required before sick leave is payable. | 52 weeks | 13 weeks |
| Waiting Period before sick leave is payable | Three days | No waiting period |
| The period for which sick pay is payable. | 10 days after one years’ service, 15 days in the third and fourth year of service and 20 days after five years’ service. | Five days |
| The amount of sick leave that is Payable. | €13.45 per hour plus a 20% shift allowance | 70% of normal pay, capped at €110 |
| The reference period for the scheme. | No reference period, but Respondent accepted 12 months | 12 months |
The Respondent submitted that their scheme was more favourable in terms of the period of pay and the amount of sick pay, while conceding that SSP scheme was more favourable in relation to period of service of an employee and the waiting period. While there was no reference period in the CSP scheme, the Respondent submitted reference period in the Act and in the scheme is equally favourable at 12 months. The Respondent further submitted that “the fact that the Complainant does not fall within the scope of the employers scheme, does not on its own, make it less favourable.”
Decision: The Adjudicator Officer, Janet Hughes, commented in her decision that while both parties made strong cases from both their perspectives, the terms of the legislation together with the rules adopted by the Department “are anything but straightforward”. The AO noted that the removal of any Illness Benefit by the Department until the sixth day of illness presumes that an employee will receive a payment from their employer for the first five days. Ms Hughes also noted that this is not stated in the legislation which makes no reference to social welfare illness benefits.
Section 9 of the 2022 Act states:
“The obligations of this Act shall not apply to an employer who provides his or her employees a sick leave scheme where the terms of the scheme confer, over the course of a reference period set out in the scheme, benefits that are as a whole more favourable than the statutory scheme”
The Respondent had submitted that “the fact that the Complainant does not fall within the scope of the employers scheme, does not on its own, make it less favourable.” The AO noted that the inference from this and the submissions overall was that future benefits in future years, outside of the reference period, could be used in determining which scheme was more favourable and justifying non-payment within a reference period.
The AO comments that the Respondent in this case sought to go outside the reference period of the first 12 months and interpret future reference periods with the benefits which the Complainant has not yet qualified for. The AO stated that this would have the effect of “undermining the concept of a reference period as a key test in the legislation”.
The AO noted that Section 9(1) of the Act “could not be clearer in stating that the criteria for determining the comparative benefits as an overall more favourable benefit, must be within a reference period”. The AO further states that the 12-month period in the Complainant’s contract provided no payment to the Complainant and the Respondent cannot therefore claim that the amount payable was better than the 2022 Act overall during this reference period.
The AO referred to the previous cases before the WRC under the Act, which were cited in the submission of the Respondents. In Karolina Leszczynska v Musgrave Operating Partners Ireland (ADJ-00044889)(our previous article on this case is linked below), the decision is distinguished from the current case as the Complainant, while subject to a waiting period was entitled to a further seven weeks sick pay within the reference period and it was on that basis that the CSP scheme was deemed more favourable overall.
Similarly, in James Flynn v Garrett Advancing Motion (ADJ-00044305), the AO noted thatthe CSP did not provide benefits to employees with less than 52 weeks service. However, the Complainant in that case had the required service and was therefore entitled to benefit from the first day of illness. The AO notes “these were cases where the assessment was made based on a period of 12 months which included a period of active sick leave.” The AO further commented that these cases were attempts by the Complainant to add the benefits of the SSP scheme to the existing benefits within a reference period, which is expressly prohibited by the 2022 Act.
Finally, the AO referred the amount payable criteria and within the 12-month reference period, the Complainant was not entitled to any payment, the Respondent’s scheme did not confer benefits which on the whole were more favourable than the SSP scheme. The AO awarded the Complainant a payment of €1,000 compensation and based her decision on the scheme as set out in the Complainants contract and the reference period weeks one to 52.
The AO in her detailed decision did point to the fact that the Act provides little clarity as to a minimum payment within a reference period and this, combined with the absence of any payment from the Department of Social Protection until the sixth day, seems to assume that in any 12-month reference period an employee will, at least receive the statutory payment. However, Ms Hughes did state “Whether or not this was the intention is more properly a matter for the legislators to clarify”
Takeaway for Employers: This decision emphasises the importance of reviewing and thoroughly evaluating any company sick pay scheme in determining whether the scheme is truly more favourable than the statutory sick pay scheme, within the reference period. Should a company sick pay scheme be deemed more favourable overall, then the statutory sick pay scheme is not applicable.
An assessment can be carried out pursuant to Section 9(2) of the 2022 Act, which sets out criteria to be considered, such as period of service before sick pay is payable, the number of days an employee must be absent before entitlement arises, the period of sick days available, the level of salary payable and the reference period for the scheme.
It should be noted that prior to the hearing, the Respondent reevaluated their scheme and reduced the service requirement of 12 months to 6 months, provided for 5 days sick pay and reduced the waiting period to two days. The revised scheme was offered to the Complainant as a gesture of good will, however the Complainant sought to continue with her complaint with the WRC.
She still contended that the amount payable by the revised scheme was less than the SSP scheme and also that overall it was still not more favourable. Notwithstanding this contention by the Complainant, it remains to be seen whether the decision of the WRC would be the same under the terms of the company’s revised scheme.
Links
Ann Britton v Amcor Flexibles Ltd (ADJ-00050138)
WRC Examines First Case Under Sick Leave Act 2022
Authors – Ethna Dillon and Anne O’Connell
27th October 2024
Anne O’Connell
Solicitors
19-22 Lower Baggot Street
Dublin 2.
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