Preparing for New Sick Pay Rules
Until now, Irish employers have not been obliged to pay employees during sick leave. The new legislation changes that.
The new statutory sick pay rules are due to come into effect imminently in Ireland. Irish employment contracts may provide for a limited period of sick pay, but this has always been at the discretion of the employer. If employers chose not to provide this, affected employees must apply for state-sponsored illness benefits subject to PRSI contributions.
This is now going to change. The obligation to pay an employee sick leave will now be on the employer.
What are the changes?
Under the new regime employees will have an entitlement to three days of paid sick leave this year. This is then due to go up to five next year, seven in 2024 and ten in 2025. The increases will be made by way of ministerial order each year. Factors including the state of the economy generally must be considered by the minister when making their decision.
The draft bill does not specify the amount of statutory sick pay. It simply states that an employer must pay a prescribed daily rate for a statutory sick leave payment. The intention of the government is to place a cap on the amount of statutory sick leave. It has been suggested that an employer will only be obliged to pay up to 70% of wages subject to a cap of €110 a day.
Employees will need to have at least 13 weeks of continuous service before they are eligible for statutory sick pay. It’s important to note that employees will be obliged to furnish a medical certificate in respect of each day of statutory sick leave.
If an employer already provides more favourable sick leave benefits to an employee, they will not be obliged to comply with the statutory sick pay rules. However, the employer will have to demonstrate that any discretionary or pre-existing scheme is more favourable than the one provided in the legislation.
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What You Need to Know About Staff Handbooks
The most essential document governing the employment relationship is the contract of employment. If you don’t want your employment contract to be too long and untidy you should be referring to your staff handbook when talking about grievances, discipline, dignity at work, anti-bullying, and other workplace policies.
Staff handbooks should be easy to read, and a copy should be easily available to all employees. New employees must read the handbook and indicate that they have done so by giving their signature. It is important to review and amend the policies regularly to ensure any changes in the law or best practices are reflected.
Most important policies and procedures in the workplace
In Ireland, the most important policies, and procedures to have in place are those covering
- Grievances
- Discipline
- Dignity at work (anti-harassment, anti-bullying, and equal opportunity)
- Health and Safety
Other topics that should be considered are, sick leave, holiday leave & pay, hours of work, internet and email usage, dress code, expenses procedure retirement and pension benefits etc.
Bright Contracts
With Bright Contracts, we provide ready-made handbooks that fully conforms to the latest employment law guidelines. The software allows you to add additional sections to handbooks, edit, delete or reorganise the built-in- content and you can easily add your own. You can preview your handbook at any time while you build it and print or export it when it is ready. It’s great as you need no employment law knowledge, we do all the hard work.
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How to Dismiss an Employee
Unfortunately, as an employer or business owner, you need to know how to dismiss an employee. No matter what the reason is there is a process that you should always adhere to.
The most important thing to consider is the reason for the termination and if you have taken any steps to try and assist your employee. If you are dealing with an underperforming employee, you shouldn’t automatically think of dismissing them. You should instead understand why the employee is underperforming and assist them in any way to help them improve.
Investigate the situation
The first thing that needs to be done if you are considering dismissing an employee is to formally investigate the situation. Be sure that the documentation clearly outlines the initial complaint or disciplinary issue with the employee as well as the relevant details of the investigation itself. A full list of participants, including what was said in any of the interviews.
After completing the investigation, you may discover the complaints or performance issues that were raised in the interviews were a misunderstanding, a false allegation or not a fault of the employee in question. In most cases, the situation can be resolved with a conversation.
Provide a warning
If after investigating and you conclude that the employee is at fault, you will need to provide them with an official warning. Where the complaint is minor or does not require further action no other disciplinary action needs to be taken.
For more serious incidents, make sure that the employee understands that you are giving them a warning and what the next steps will be if they fail to improve.
Be Professional
If you have conducted your investigations, issued a warning, and have proof of the breach of contract, then you have no option left but to dismiss your employee. For the protection of the company, it is vital that you have the right reasons and supporting evidence for the dismissal. When it comes to delivering the news, you must do this face to face with the employee.
You should adhere to the following points:
- Be prepared, and calmly explain the reasons for the dismissal
- Reiterate the previous warning that has been given and refer to the documentation
- Ensure that the process is short and does not linger for longer than necessary
For legal reasons, you should document and issue the dismissal in written format.
Honour existing agreements
Just because the employee has left does not mean that you can ignore any post dismissal laws that are in place. You must continue to follow both the company policy and legal protocols, including the payments for all hours worked up until the moment of dismissal. If you are required to give your employee two weeks’ notice you may dismiss them immediately, but you will need to provide them with the equivalent of two weeks’ pay.
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Unfair Dismissal Claims & How to avoid them
An unfair dismissal can occur when your employer terminates your contract of employment with or without notice or the employee terminates their contract of employment with or without notice due to the conduct of your employer.
A dismissal is automatically considered to be unfair if you are dismissed for any of the following reasons:
- Membership or proposed membership of a trade union or engaging in trade union activities
- Religious or political opinions
- Legal proceedings against an employer where you are a party or a witness
- Race, colour, sexual orientation, age, or member of the Traveller community
- Pregnancy, giving birth or breastfeeding or any matters connected with pregnancy or birth
- Availing of rights under legislation to maternity leave, adoptive leave, parental leave, carer’s leave, parental leave, or force majeure leave
- Unfair selection for redundancy
Steps to avoid Unfair Dismissal
Have clear policies
It is important to ensure that all new and current employees have access to the companies’ policies regarding harassment, dress code and attendance policies. The policies must be easy to read for the employee and available to them at any stage during their employment. These policies are not only to keep employees informed but they are used as important reference points to use as the employer during the disciplinary process. Failing to follow these policies can result in an unfair dismissal claim.
HR & Equality training
Employers need to make sure that the dismissal is thoroughly thought through beforehand and is not an impulsive retaliation to an employee’s actions. By providing training for all staff members involved in the dismissal process you will know that the process is being conducted legally.
Keep track of employee conduct
Terminating an employee can sometimes devolve into a he-said she-sad argument with no clear winner. Without proper documentation, it can be difficult to terminate an employee without fearing an unfair dismissal claim. When you begin to see that an employee might not be suitable for your company, start keeping track of their misconduct. Use a word document or journal to keep track of any problems the employee encounters. For example, take note of any time they showed up late or were not dressed appropriately.
Implement a performance management plan
When you first discuss with the employee about potentially dismissing them, you will need to set up a performance management plan to give your employee a chance to improve. If you still need to terminate this employee, the document plan shows that you tried to help your employee. Employers can do this by setting up parameters and goals for their improvement.
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What you Need to Know About Retirement Ages
In contracts of employment and employee handbooks, many Irish employers include a mandatory retirement age. In October 2021 the report of the Commission on Pensions was published. The report has recommended that legislation should be introduced to prevent employers from setting a compulsory retirement age below the state payment age which is currently 66.
In 2021 it was intended to further increase the State pension age to 67 from 2021, but the legislation was enacted in 2020 that suspended the increase. The Pensions Commission’s report has recommended that legislation should be introduced to prohibit employers from setting a retirement age below the State pension age. This will not affect an employee’s ability to retire at an earlier age if they choose to.
The Pensions Commission also recommends that the State pension age should increase gradually by three months per year from 2028 to reach 67 in 2031. Additionally, further increases should be implemented every second year after 2031, with the State pension age eventually reaching 68 in 2039.
It is likely that The Commission’s report has been referred to the Cabinet Committee and is being considered to bring an implementation plan to the government by the end of March 2022.
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Redundancy Payment Amendment
The Redundancy Payments (Amendment) Bill 2022 was published on the 21st of January 2022. The legislation will amend the Redundancy Payments Act 1967 to provide payments from the Departments of Social Protection to employees who were laid off during the pandemic. (13th March 2020 – 30 September 2021) Currently, periods of lay-off in the final three years of services do not count as a reckonable service. They are excluded from the amount of the statutory redundancy payment.
The Bill seeks to give employees who have lost out on their reckonable service while they were laid off during the pandemic a special payment of up to a maximum of €1,860 tax-free. This aims to close the gap in employees’ redundancy entitlements and ensure that the employee being made redundant will receive the same total redundancy payment as if they had not been laid off due to Covid-19.
To qualify for this entitlement, an employee must qualify as normal for a statutory redundancy payment. Employers may apply for the payment on behalf of the employee to the Department of Social Welfare. If the employer refuses to do the application for the employee all necessary information and documentation must be available to the employee. The amount of payment will be determined by the difference between the lump sum to which the employee would have been entitled to on redundancy if they had not been laid off due to Covid-19 and the amount to which the employee is entitled to be made redundant. Employers need to ensure that all their records in relation to any layoffs during the period (13th March 2020 – 30 September 2021) are up to date.
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