Complainant

Respondent

Parties

Karolina Leszczynska

Musgrave Operating Partners Ireland

Representatives

Self-represented 

Desmond Ryan, BL

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under the Sick Leave Act 2022

CA-00055719-001

26/03/2023

The respondent operates 22 Supervalu branches that were formerly Superquinn stores.  Around 2,000 people are employed and terms and conditions have been agreed with the Mandate and SIPTU unions.

The complainant is a shop assistant and she has worked for the respondent and previously for Superquinn since 2007.  She works around 30 hours each week over five days and she is based in the Tyrrellstown store.  Her hourly rate of pay is €16.41.

The complainant was absent due to illness for four days in 2023 and she claims that she was entitled to statutory sick pay, as provided for at section 5 of the Sick Leave Act 2022 (“the Act”).  The respondent has a sick pay scheme that provides for eight weeks’ paid sick leave; however, the first three days of absence are considered as “waiting days” and wages are not paid.

The respondent’s case is that section 8 of the Act permits an employer to substitute a more favourable sick pay scheme for the terms of statutory sick leave at section 5, and section 9 sets out the matters to be taken into consideration when determining if an employer’s scheme is more favourable.  Mr Ryan argued that the respondent’s scheme provides a greater level of benefit compared to statutory sick leave and that the complainant’s case is not well founded.

Evidence of the Complainant

The complainant said that she has worked in the company for 16 years and, before January 2023, she was out sick only once.  She said that she is very hard-working and that doesn’t like being absent.  On Thursday, January 26th 2023 however, she was sick and she got a medical certificate from her doctor.  She was rostered to work on Thursday, Friday, Saturday and the following Monday and, in her evidence, she said that she went back to work after four days, even though she didn’t feel completely well.  She said that she didn’t want to leave a colleague working on her own.

When she was paid for just one of the days she was absent, the complainant said that a friend told her about the Sick Leave Act.  She enquired with her store manager about her entitlement to paid sick leave and he told her that the company pays for 40 days leave, but not for the first three days.  On February 23rd, she sent an email to the HR helpline and she got a reply the following day asking her which store she worked in.  She replied to that email, but she got no further response.

The complainant said that she contacted the Citizens Information Service and the WRC and she was advised to make a complaint.  Although she is a member of Mandate, she said that she did not seek advice from the union before submitting this complaint.

At the conclusion of her evidence, the complainant said that she feels as if she is being discriminated against for being a hard-working employee who is seldom out sick.  Mr Leszcynska referred to section 8(1)(b) of the Act and the phrase “more favourable to an employee” and he said that the terms of the Act are more favourable to the complainant, who was out sick for just four days and who has never been on long-term sick leave. 

It is the respondent’s case that the obligations under the Act do not apply because their employees have access to a sick pay scheme which, on the whole, is more favourable than statutory sick leave.

Across the respondent’s 22 stores, employees are members of SIPTU and Mandate and the terms of the sick pay scheme have been agreed with the unions.  A copy of the company’s sick pay scheme was submitted in the respondent’s book of documents.  In summary, the scheme provides the following benefits:

§  An employee with six months’ service is entitled to paid sick leave.

§  The first three days of absence are unpaid “waiting days” and paid sick leave commences on the fourth day of absence.

§  Employees are entitled to eight weeks’ full pay in a rolling 12-month period (less any social welfare benefit).

§  The daily rate of pay is based on the average of the employee’s weekly hours in the 13 weeks preceding the fourth day of absence, divided by five.

§  To be entitled to sick pay, employees must submit medical certificates on a weekly basis.

When the complainant was absent on January 26th, 27th, 28th and 30th, the respondent applied the terms of its sick pay scheme and paid her 5.05 hours in respect of her fourth day of absence.

Legal Submissions

Section 5 of the Act provides that, commencing on January 1st 2023, employees are entitled to three statutory leave sick days.  The first day of absence due to illness or injury is the first statutory sick leave day.  Mr Ryan submitted that this provision must be read in the context of two subsequent sections in the Act.  Section 8, entitled, “more favourable provision in contact of employment,” provides, at subsection (1) that,

(1) Nothing in this Act shall prevent the inclusion in a contract of employment of a provision that is -

(a) as favourable to an employee as, or

(b) more favourable to an employee than,

an entitlement to statutory sick leave in accordance with this Act, and any such provision shall be in substitution for, and not in addition to, that entitlement.

Mr Ryan submitted that the use of the word “substitution” must be given a plain meaning, signifying an alternative or replacement sick pay scheme.  The significance of this point is seen when analysing the further non-application provision at section 9 of the Act:

(1) The obligations under 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 to the employee than statutory sick leave.

(2) In determining, for the purposes of subsection (1), whether a sick leave scheme confers benefits that are, as a whole, more favourable than statutory sick leave, the following matters shall be taken into consideration:

(a) the period of service of an employee that is required before sick leave is payable;

(b) the number of days that an employee is absent before sick leave is payable;

(c) the period for which sick leave is payable;

(d) the amount of sick leave that is payable;

(e) the reference period of the sick leave scheme.

To determine if the respondent’s sick leave scheme confers upon its employees benefits that are, “as a whole more favourable,” Mr Ryan said that the following matters must be taken into consideration:

a.      The period of service of an employee before sick leave is payable;

b.      The number of days that an employee is required to be absent before sick leave is payable;

c.      The length of time for which sick leave is payable;

d.      The amount of sick leave payable;

e.      The reference period of the sick pay scheme.

Each of these matters were addressed in turn in the respondent’s submission.

a.       The period of service of an employee before sick leave is payable

Before being entitled to statutory sick pay, an employee is required to have completed 13 weeks of service.  While it may be argued that the statutory scheme is more beneficial, Mr Ryan submitted that the difference in the service requirement is a minor one and one which doesn’t affect 89% of the respondent’s employees who have more than six months’ service.  As the complainant has 16 years of service, she is not affected by this point and the respondent’s scheme cannot be considered to be less favourable to her.

b.       The number of days that an employee is required to be absent before sick leave is payable

Subsection 5(4) of the Act provides that statutory sick pay is payable from the first day in a year that an employee is absent due to illness or injury.  The respondent’s scheme provides for payment after three “waiting days” and payment commences from the fourth day.  While the provisions in the Act are more advantageous than the provisions of the respondent’s sick pay scheme, Mr Ryan submitted that the difference is minor and is outweighed having regard to the benefits in the scheme “as a whole,” in accordance with section 9 of the Act.

c.       The length of time for which sick leave is payable

The respondent’s scheme provides for up to eight weeks’ paid sick leave, compared to the provision in the Act for three days’ paid leave.  As the respondent’s scheme is vastly more advantageous, Mr Ryan submitted that this difference should be a significant consideration in my assessment of whether the respondent’s scheme is “as a whole more favourable” than statutory sick pay.

d.       The amount of sick leave payable

The amount of statutory sick pay is set out in the Sick Leave Act 2022 (Prescribed daily rate of payment) Regulations in Statutory Instrument 607 of 2022.  As the complainant is paid on the basis of a fixed hourly rate, if she was entitled to statutory sick pay, the amount would be 70% of her average daily wages in the 13 weeks before she went absent due to illness.  The respondent’s scheme provides a payment of 100% of an employee’s daily wages, less any social welfare illness benefit that may be payable.  This is well in excess of the 70% payable under the statutory scheme, and the 100% payment extends well beyond the three days to which the Act is limited.

e.       The reference period of the sick pay scheme

The Act does not provide for a reference period in its own terms, but, at section 5(2), provides for three days’ paid sick leave in a year.  The respondent’s scheme provides for eight weeks’ paid leave in a rolling 12-month period.  The rolling 12-month period is the reference period for the respondent’s scheme.  The Act does not state whether the provision of three days’ paid leave in a year is in reference to a “rolling” year or a calendar year.  However, in either case, the reference period in the Act and in the respondent’s scheme is the same.  On this basis, it must be said that the reference period in the Act and in the respondent’s scheme are equally favourable. 

Industrial Relations Considerations

Mr Ryan asked me to consider the fact that the respondent’s scheme is the result of a collective bargaining process agreed between employees and their trade union representatives.  He submitted that it must be a policy objective of the WRC to facilitate collective bargaining and to respect collective bargaining agreements.  If I, as the adjudicator in this matter, decide that the provisions of the Act are more favourable than the respondent’s sick leave scheme, this would de-stabilise industrial relations in the business and would result in a requirement to re-negotiate a new scheme which mirrors the provisions of the Act.  Such a new scheme is likely to mean that the respondent would adopt a position in which the length of time it can provide sick pay and the rate of pay available may be significantly reduced, as well as other possible cost-saving measures.  Mr Ryan said that employees and their union representatives should be free to decide what is more favourable, and overriding their collectively bargained sick leave scheme undermines this position.

Conclusion

The respondent’s position is that the provisions of the Act are more beneficial than the company’s sick leave scheme in respect of the length of service that an employee is required to have completed before sick leave is payable and the number of days that an employee must be absent before sick leave is payable.

The provisions of the Act and the respondent’s scheme are equally favourable in respect of the reference period for payment of sick pay.

The respondent’s scheme is far more favourable than the provisions of the Act in relation to the number of days for which sick leave is payable and the amount which is paid.  With an entitlement to eight weeks’ paid sick leave, the respondent’s scheme provides over 10 times the amount of paid sick leave compared to the statutory scheme.  It also provides 100% of regular daily pay, less any social welfare benefit payable.

As a whole, the respondent’s scheme is more favourable than the provisions of the Act.  For this reason, the respondent’s position is that the Act can have no application in their business.  Mr Ryan closed his submission by asserting that, due to the provisions of section 9 of the Act, the respondent is not obliged to pay statutory sick pay under section 5.  

Evidence of the HR Manager, Ms Siobhán Power

Ms Power said that terms and conditions of employment for its employees transferred from the former Superquinn business and the sick pay scheme is part of a collective agreement negotiated with SIPTU and Mandate.  No submissions or queries have been received from the unions about the sick pay scheme since the enactment of the new legislation on January 1st 2023.

Before the legislation was enacted, Ms Power said that they compared the company’s scheme with the provisions of the Act and they had a meeting with the HR managers.  They then had a meeting over Microsoft Teams with the store managers.  They concluded that the company’s scheme was more favourable than what was set out at section 5 of the Act.

Mr Ryan asked Ms Power about the complainant’s assertion that she is worse off under the company’s sick pay scheme.  Ms Power said, “Yes, in this instance.  But, if she was out longer, she would be better off for a longer period of time.”  Looking at the application of the legislation as a whole, Ms Power said that the company’s scheme is more favourable and that employees are better off under the company’s scheme when they are out sick for longer.

Ms Power referred to the fact that 89% of the company’s employees have more than six months’ service and this entire group has met the service requirement under the company’s scheme.

Ms Power said that there would be consequences for the agreement negotiated with SIPTU and Mandate and the impact on colleagues would be significant if the company applied the statutory scheme.

Regarding the communication with Ms Leszcynska concerning her query about her sick pay entitlements, Ms Power said that the store manager in Tyrrellstown was instructed to explain to her that the company’s sick pay scheme is more favourable than the provisions of the new legislation.

The Legal Framework

The preamble to the Sick Leave Act 2022 states that its purpose is,

… to provide that employees shall, subject to certain conditions, be entitled to up to and including 3 statutory leave days[.]

Clearly, the legislation is intended to confer a benefit on employees with no contractual entitlement to paid sick leave.  Statutory Instrument 607 of 2022 fixes the daily rate of statutory sick pay at €110 or 70% of the employee’s gross daily rate of pay, whichever is the lesser.  

Section 5(4) of the Act provides that,

The first day in a year that an employee is incapable of working due to illness or injury shall be the employee’s first statutory sick leave day, and any subsequent statutory sick leave days shall be construed accordingly.

With the objective of providing a benefit to employees, it is necessary for the legislation to determine the days for which the benefit of statutory sick pay applies.  The most rational approach is to provide that the first three days of absence is to be paid, because any consideration of days further into a period of absence may act as a disincentive to an employee who has recovered from illness from returning to work.

Section 8(1) provides that an employer may provide a benefit that is,

(a) as favourable to an employee as, or

(b) more favourable to an employee than,

an entitlement to statutory sick leave in accordance with this Act, and any such provision shall be in substitution for, and not in addition to, that entitlement.   

The respondent’s case is that the provision of eight weeks’ sick pay paid at 100% of pay is more favourable to employees than three days’ sick pay paid at the lesser of €110 or 70% of pay.  One of the conditions of the employer’s scheme is that there is a waiting period of three days before an employee becomes entitled to sick pay.  The issue I must consider is, if this condition has the effect of making the employer’s scheme less favourable than the new statutory sick leave benefit.

Findings

The application of a waiting period of three days is consistent with the same condition attached to the payment of Illness Benefit by the Department of Social Protection.  This has been followed by the majority of employer’s schemes, where the entitlement to paid sick leave commences on day four of absence.  It is not my function here to investigate the genesis of this three-day waiting period, but its logical purpose seems to be to discourage short, intermittent absence.  Where an employee is paid while they are out sick for a reasonable length of time, it is my view that it is not unreasonable for an employer to adopt this approach.

Under the Act, employees are entitled to statutory sick leave after 13 weeks and, in the respondent’s scheme, employees are entitled to paid sick leave after 26 weeks.  For the complainant, and for 89% of the respondent’s employees, this condition is irrelevant; however, it must be included as a factor when deciding if, “on the whole,” the respondent’s scheme is more favourable.

There can be no arguing that eight weeks’ paid sick leave is more beneficial than three days and pay at 100% of wages is more beneficial than 70%.

With the respondent’s scheme, the policy of not paying sick pay for the first three days of absence is a disadvantage for an employee who is absent for a maximum of three days once in 12 months.  It is my view that this is outweighed by the policy of waiting until the fourth day, and paying sick pay to employees who are absent for up to eight weeks in 12 months.  I find also that the eight weeks’ sick pay outweighs the requirement to have six months’ continuous service, compared to the 13 weeks required under the Act.

It is apparent that what emerged from negotiations between the respondent and the unions representing employees was a sick pay scheme designed to provide a benefit to employees who are unable to work due to illness, and that its design includes a provision that discourages short-term absences.  Since the enactment of the Sick Leave Act, the parties have not initiated any discussions to change this policy.

I have considered the employer’s scheme and I have compared its benefits with those of the Sick Leave Act.  It is my view that the duration of paid sick leave in the employer’s scheme, the amount of sick pay, the 26 weeks’ service requirement and the three-day waiting period combine to provide benefits that, on the whole, are more favourable to employees than the benefits provided in the Act.

In summary, while the complainant’s case is not unreasonable, and her claim raises an important legal point, I find that the respondent’s scheme is encompassed by section 9(1) of the Act and that its benefits are, as a whole, more favourable to the employee than statutory sick leave.

For the reasons set out above, I have decided that this complaint is not well founded.

Comparison between statutory sick pay and the respondent’s sick pay scheme.