Complainant

Respondent

Parties

Ann  Britton

Amcor Flexibles Ltd.

Complainant

Respondent

Anonymised Parties

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Representatives

  Self

Terry MacNamara Ltd

Act

Complaint/Dispute Reference No.

Date of Receipt

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

CA-00061487-001

10/02/2024

This case is one which began when the Respondent informed the Complainant that she would not be receiving any payment for a period of certified absence in January 2024 because the Respondent had a sick benefit scheme in place which she was informed is overall better than the terms of the statutory sick pay scheme in place at the time.

The Complainant commenced employment with the Respondent on 20/04/2023 on a probationary period of six months. She received a written statement of her terms of employment. Included in those terms was a sick pay scheme with the following terms:

‘Once you have completed twelve months service, you eligible(sic) for paid sick leave of up to ten days in any twelve-month period on presentation of clear medical certification on the third day of absence. This increases to 15 days in the 3rd and 4th year of employment and to 20 days in the 5th year of employment.

Any refunds due under the social welfare scheme whilst being paid by the company are due to the Company either by deduction or repayment.

And …a medical certification is required for absences lasting more than two days. The certificate must be submitted no later than the third day of the absence.

The scheme in the contract involved a waiting period of three days before the Respondent paid sick pay on the fourth day. This is the historical waiting period for payment of social welfare payments which is not an unusual waiting period in an employer scheme. Benefits from the Respondent scheme in the contract therefore became payable on the fourth day of a certified absence.

Payment of sick pay is described as discretionary and not payable in certain circumstances, noncompliance, or abuse as described in a separate attendance policy.

For two weeks of absence the scheme in the contract paid basic pay plus shift premium, reverting to basic pay after two weeks absence.

In cases of an injury at work, the normal limitations of the scheme were suspended.

The scheme operates on a rolling year basis.

Any social welfare illness benefits received by an employee are repayable to the Respondent. Effectively the Respondent tops up a social welfare payment to normal pay and for some periods, normal pay plus shift premium (where applicable).

On 2/02/24 the Complainant commenced sick leave over a five-day working period to 08/01/24. She contacted HR and provided a medical certificate. On her return to work the Complainant contacted a manager about payment of the statutory sick pay scheme. At that point in time, she was not eligible for any benefit under the Respondent scheme as she had less than 52 weeks service.  She was informed that she would not be paid the terms of the statutory sick pay by the Respondent as the Company sick pay scheme was more favorable than the statutory scheme. The Complainant did not accept that assessment, and she referred a complaint to the WRC on 10 February 2024.

As of January 2024, the statutory sick leave scheme increased from three to five days sick pay over a twelve-month period payable at a rate of 70% or normal pay up to a maximum of €110 per day which may be taken in segments of days up to a straight five-day period. There is no waiting period under the scheme. All sick leave must be certified.

Prior to the hearing, the Complainant informed the WRC that some changes were made to the Company sick pay scheme effective from March/April 2024. The parties differ as to whether this revised scheme represents a collective agreement for the purposes of the sick leave act at section 9(3)(a).  The revised scheme states that the Amcor sick leave policy goes beyond the minimum requirements of the statutory scheme. The key changes in the revised scheme compared to the scheme in the Complainants contract are that an employee becomes eligible for five days sick pay after passing the statutory probationary period of six months (reduced from twelve months) and the waiting period for payment by the Respondent is reduced from three days to two working days so that an employee would receive a payment from the Respondent on the third instead of the fourth working day of the absence. The scheme also states clearly that no payment of illness benefit will be made (by social welfare) for the first five days of illness which they describe as waiting days.

As a gesture of goodwill, the Respondent did offer to apply the terms of the revised scheme to the Complainant as she had by then the six months service required to access the revised scheme and she had completed her probation. The Complainant declined on the basis that the payment from the Respondents revised scheme would be less than the amount payable for a five-day absence under the statutory sick pay scheme. She also contended that the terms of the revised scheme are not better overall than the benefits from the statutory scheme.

The issue to be decided is whether, by application of the tests contained in the Sick Pay Act 2022, the Respondent was correct in their response to the Complainant that in January 2024, the terms of the company scheme were better overall than the statutory scheme and by extension that they therefore were not obliged to make any payment to the Complainant at that time.

The Complainants case is quite straightforward. In January 2024 she was out on certified sick leave. A medical certificate was provided to the Respondent in good time. However, she was denied payment of statutory sick pay. The Department of Social Protection did not pay her illness benefit for the same period on the ground that she was to receive sick pay for the first five days from her employer in accordance with the statutory scheme. Social welfare illness benefit would not be paid until the sixth day. In July she received confirmation from this official position from the Department in response to a request which I issued on 08.07.24. The Complainants case is that the Respondent should have paid her the terms of the statutory scheme in January 2024.

The Complainant rejects the claim by the Respondent that they were not required to pay the equivalent of the statutory scheme on the ground that their scheme as it applied in her case  was better overall. She provided detailed calculations of the amount she would receive when she became eligible for periods between five and ten days. In her calculations, the  statutory  illness benefit payable  after thirteen weeks service was combined with the single person social welfare illness benefit (which commences after six days of absence in a twelve-month period). She contends that with a three-day waiting period the benefit of the Respondent sick pay scheme would only occur where the employee is absent for more than seven days in succession and then only on the eight day.  Similarly, once the Respondent waiting period was reduced to two days, it would be the seventh day of an absence before any employee in her category of worker would benefit from the Respondent scheme. If she had accepted the gesture of good will from the Respondent, the benefit from the revised Respondent scheme would have been less than the statutory scheme for the five days after six months service as there was always a waiting period under the Respondent scheme and none under the Statutory  scheme. The Complainant submitted some research in the UK entitled No Time to be Sick: Why Everyone Suffers When Workers Don’t Have Paid Sick Leave(Institute for Women’s Policy Research).

The Complainant provided a breakdown of the service of employees in the Company indicating a significant number at less than twelve months service and another cohort with less than the  three years’ service, the point at which they would be entitled to fifteen days sick pay in a twelve-month period.

The Complainant rejected the comparison with the ‘Musgrave’ WRC Decision on the basis that whereas that employer was able to point to a collective agreement negotiated with a Trade Union, no such representative collective body existed within the Respondent’s employment.

The Respondent defends this claim in full and submits that the obligations under the Sick Leave Act 2022 do not apply in their case and to the Complainant because they provide their employees with a sick leave scheme which is on the whole more favourable  to the employee than statutory sick leave. In their written submission the Respondent contended that the payment terms from their scheme are vastly superior to those in the statutory scheme in the case of the Complainant. In addition, at the hearing, the Respondent referred to the overall wage profile in the employment meaning  that many employees have higher rates of pay than the Complainant and would receive payments far in excess of the statutory scheme. This is a factor to be considered in determining whether the scheme as a whole is more favourable than the statutory scheme. The submission set out each relevant section of the Act.

Describing the legal question which arises in this case as the  requirement to examine each and all of the tests set out in Section 9(2) in arriving at a decision. They went on to compare the statutory and respondent schemes under the factors set out in section 9. The wording of the Act is in italics followed by a summary of the Respondent position

1.     Period of service of an employee that is required before sick leave is payable

As the statutory scheme provides a thirteen-week qualifying period and the Respondent scheme which applied to the Complainant was a fifty-two-week period, it is accepted this term in the statutory scheme can be described as better overall.

2.     The number of days an employee is absent before sick leave is payable (the waiting period)

As the statutory scheme of up to five days contains no waiting period and the Respondent scheme at the time contained a three-day waiting period, it is accepted that in that limited respect the Statutory scheme can be described as advantageous.

3.     The period for which sick pay is payable. The Respondent scheme at the time providesfor 10 days sick pay in a twelve-month period after one years’ service, 15 days in the third and fourth year of service and twenty days after five years’ service whereas the Act only provides for five days sick pay in a twelve-month period. As such the significant difference in the increased number of days allied to service and accruing over time in the Respondent scheme should be accordingly weighted in a Decision.

4.     The amount of sick leave that is Payable. The Complainants rate of pay in January2024 was €13.45 per hour plus a 20% shift allowance. The Respondent contends that their sick leave scheme is more favourable and well in excess of the 70% payable under the statutory scheme. 

5.      The reference period for the scheme. Accepting there is no reference period within the Respondent scheme, the Respondent submitted that the reference period in the Act and the scheme is equally favourable at twelve months taking the provision of an allowance of ten to twenty days in a twelve-month period in the Respondent scheme into account.

Overall while the statutory scheme is more favourable than the Respondent scheme in some limited respects, all of the considerations must be taken into account. The fact that an employee, in this case the Complainant  does not fall within the scope of the employers scheme, does not on its own, make it less favourable(than the statutory scheme).

The HR Manager gave evidence of the conclusion of revised terms for the sick pay scheme with co-workers within the employment who meet on a monthly basis. They met on 31 January 2024 and a review resulted in the reduction of the waiting day period to two days in any period of sick pay and reduced the service qualifying period from twelve months to six months service. Her figures for the service of employees presented a more favourable profile in terms of the length of service of employees i.e., more employees whose service would qualify them for the five,  ten and more days under the  scheme/s. Regarding the evidence of the Complainant that she was informed by the Department of Social Protection that she was not entitled to any illness benefit for the five days absence in January 2024, the witness stated that she only knew that another employee in the same position had asked her for confirmation that the Respondent did not pay her sick pay as she required that information for the Department. That other employee did not come back to her after that.

Asked by the Complainant if she accepted the detailed figures she had provided showing the difference between the two schemes, the witness declined to respond to the detail on the basis that as an accountant by background she would not give a reply until she had examined all of the figures in detail.

By way of precedent, the Respondent referred to ADJ-00044889(copy supplied) and ADJ00044305(copy not supplied). In both Decisions, the Respondent sick pay scheme was found to be more favourable than the Statutory scheme.

The parties can be assured that the most detailed and careful consideration was given to the case made by both parties. Indeed, the parties will be aware that I sought additional information post the hearing in a letter of 08/07/24. While the parties both made strong cases from their perspective, the terms of the legislation together with the rules adopted by the Department of Social Protection based on their interpretation of the legislation render the issues to be considered anything but as straightforward as either party contends. In reality there is very little by way of guidance from the legislation as to what they consider a better scheme overall to look like. Whereas the scheme was put out as providing a minimum level of benefits, the absence of a legal minimum to that payment during a reference period is proving unhelpful. While the removal by the Department of Social Protection of any entitlement to a state illness benefit until the sixth day in twelve months implies that Department presumes a worker will receive a payment from an employer for at least five days in any reference period, this is not stated in the legislation which does not refer to social welfare illness benefits.

As things stand there may well be reference periods where this or any Respondent can demonstrate their scheme is better overall even where the financial benefits actually paid in an active claim in that period are less than the statutory amount. Whether this was intended or unintended is not clear.  The decision of the Department of Social Protection to assume that an employee will receive as a minimum, five days sick pay and to adjust the  suggests that Department assumed a worker on a certified absence/ would receive as a minimum, up to five days sick pay in a twelve-month period commencing with the first  day of a certified absence. Such an assumption clashes with the actual terms of the legislation which seems to  allow a hypothetical period of benefit within a reference period  to be included in an assessment of a scheme. Neither does it corelate with the effective derogation from the statutory scheme which includes a comfort to previously existing scheme providers that the terms of the 2022 Act are not in addition to the existing schemes. The combination of the Respondents understanding of  the legislation and the absence of any support from the State had the most severe effect on the Complainant in that she received nothing at all from either payee. The nett effect of competing interpretations of the Act of 2022, one by a statutory body, means that the Complainant was almost certainly worse off when she was ill  in the first fifty-two weeks of her employment than if the 2022 Act had never been introduced. Certainly, she had no access to payment of the statutory payments, as a minimum.

In terms of the facts in this case, the Respondent accepts that in respect of two of the five criteria for measuring the benefits of the respective schemes overall, the Statutory scheme is more favourable than the Complainants contractual entitlement i.e., the qualifying period and the waiting period. It could be said that these points are irrelevant where there is no amount payable. The concept of the reference period is therefore crucial to deciding on this complaint.  The Respondent contends that a twelve-month period is the appropriate reference period as it is the same as the reference period in the statutory scheme.

The period for which sick leave is payable and the reference period are linked in section 9(1) of the Act where it states: ‘The obligations of this Act shall not apply to an employer whoprovides 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’ [My emphasis]. In this case, the Respondent is seeking to go outside the reference period of weeks one to fifty as expressed in the Complainants contract and to import into the reference period benefits from future periods of twelve months for which she had not yet qualified. This methodology is effectively  justified in the submission where they state:

‘ The fact that an employee, in this case the Complainant does not fall within the scope of the employers scheme does not on its own make it less favourable. ‘

The inference from this assertion and the submission overall, is that the benefits in future years, outside of the reference period can be used to decide that the benefits of the employer sick pay scheme is better overall and by extension to justify  no payment at all during a reference period. Such an approach would have the effect of undermining the concept of a reference period as a key test in the legislation. It is regrettable that the Act is not more precise about what constitutes a reference period. However, as this Respondent (and those in other cases) have all submitted twelve months as a reference period, they then seek to undermine that reference  period by drawing into that reference period benefits which fall outside of that period e.g., in two three ten or fifteen years, for comparison purposes.

To be properly assessed for comparison  purposes  there must be activity in the reference period and the benefits must be those which apply in that reference period. 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. A reference period of twelve months is not thirteen months or twenty-four months or into the future outside of the reference period. This form of analysis seems to confuse costs to the employer with benefits to employees.

In this case the contract of the Complainant set out her sick pay entitlements. There was no reference to any local group or collective bargaining which could alter those terms. It was that contract which was used to assess and deny her any sick pay benefits. The dispute between the parties  about the existence of a collective agreement or group agreement is therefore not relevant to the current complaint.

During the twelve-month period specified in the contract the Respondent scheme provided  no period  of sick payment for the Complainant,  at all. The Respondent therefore cannot claim the amount payable(the fourth criterion) was better than the 2022 Act overall during that reference  period. This falls well below the concept of providing a minimum benefit to workers with the introduction of the 2022 Act. Moreover, it differs from the circumstances in ADJ-00044889 and  ADJ-00044305 . In the first of these decisions, the Complainant did receive a payment on her first absence albeit after a waiting period. Of significance in that Decision is that the Complainant had an additional entitlement to at least seven weeks sick pay in the reference period. It was on that basis the AO decided the scheme was better overall in that reference period. In the second case cited,  while that scheme did not provide benefits for any employee with less than fifty-two weeks service, the Complainant in that case did receive a payment on a day one basis and had access to further benefits in the same reference period, having well over fifty-two weeks service. These were cases where the assessment was made based on a period of twelve months which included a period  of active sick leave.  In both of these cases it could be said that the Complainants were attempting to simply add on the benefits of the statutory scheme to existing benefits within a reference period which is expressly ruled out in the 2022 Act.

There remains the criterion of amount payable. Within the reference period of twelve months based on the Complainant contract there was no amount payable.

The absence in the Act of any clarity regarding a minimum payment in a reference period allied to the non-payment of social welfare illness benefit until the sixth day of absence seems to assume that in any twelve-month reference period an employee will, over the course of that period, receive at least statutory payment. Whether or not this was the intention is more properly a matter for the legislators to clarify. In this case, given the total absence of any payment during the reference period of the fifty-two-week exclusion period specified in that contract the Respondents scheme did not confer benefits which were, on the whole, more favourable than the statutory sick leave of five days paid leave based on 70% of her salary.

In accordance with the terms of Section 14(2) of the 2022 Act, allowing for the impact of a complete non-payment for the sick absence in question and the efforts she has made to correct that situation  in line with her understanding of the legislation, I consider that payment of  €1000 compensation is appropriate in the  circumstances. For the avoidance of doubt, this decision applies only to the scheme in place under the Complainants contract and in respect of the reference period of weeks one to 52.

CA-00061487 Sick Leave Act 2022 The complaint by the Complainant Anne Britton against the Respondent Amcor Flexibles Ltd is well founded. The Respondent is to pay the Complainant €1000 compensation.

Statutory sick pay scheme-employer illness benefits-reference period