Seanad Éireann debate -
Wednesday, 29 Jun 2022

In section 7, we were discussing the understandable reasons employees would want 100% pay cover, as well as the understandable burden on small employers who are already very concerned about having to pay 70% of the statutory sick pay in addition to the replacement cover. This was brought to my attention by the Local Jobs Alliance that consists of small, local and family-run businesses, including the Convenience Stores and Newsagents Association, the Retail Grocery Dairy and Allied Trades Association, RGDATA, Irish Small and Medium Enterprises, ISME, the Vintners' Federation of Ireland, the Licensed Vintners Association, and the Restaurants Association of Ireland.

One can understand how we keep coming back to the point about getting the balance right. The Local Jobs Alliance suggested the idea of a rebate. I am aware reference has been made in the Bill to an employer's inability to pay, but employers are talking about situations in which they could provide documentary evidence that an extra employee was paid for during the period of sick leave in order to ensure that there is no interruption to business activities. They make the point that any rebate could be viewed as an allocation of the employer PRSI and not an additional cost to the Exchequer. I am aware we are on Committee Stage, but is that something the Department and the Minister of State would consider and potentially bring forward on Report Stage?

I understand why there is a push for employees to have 100% cover. However, as Senator Currie said, it is about striking a balance, particularly for small childcare providers. In order to open a room to provide childcare spaces for parents, employers have to meet staff to children ratios, therefore, they have to have cover. They do not have room to avoid making sure that there is staff cover in place. Presumably they will get it and, thankfully, there will be moves in that direction also.

For small childcare providers, there is the situation whereby they would have to provide 100% of the payment cover. In that regard, I appeal to the Minister of State to consider the idea of a rebate as put forward by the Local Jobs Alliance, which Senator Currie mentioned. In mandatory situations where cover is required, there should be a rebate when it is obvious and provable that cover had to be provided.

In starting off with 70% until everybody gets used to this measure, perhaps we could review this in a number of years and see how it is working. In the context of some very small employers having to absorb this as a costs, I again ask the Minister of State to consider the possibility of a rebate.

I thank the Minister of State for coming to the House to discuss this all-important issue. There is overwhelming support for the general thrust of the Bill. It is about bringing in sick pay for employees who never had the option of it to date.

While there is goodwill, I too support the call from the Local Jobs Alliance, about which my colleagues, Senators Currie and Seery Kearney have spoken, and ask the Minister of State to consider its suggestion. I know we could bring forward an amendment on Report Stage if we thought it would work. When the Tánaiste was before the Seanad, he said that the Department was willing to consider looking at the whole rebate scheme side of it. This is especially relevant for smaller employers, many of whom have had such a burden during Covid, and now with the war ongoing, there are so many extra costs involved. While the employers are willing to pay employee sick pay that will be phased in over time, some of them are still not back up and running fully. The Minister of State might not be able to look at this matter today, but if he could come back to us on this or take it into consideration, it would be appreciated.

I acknowledge it is about striking a balance.

As my colleagues, Senators Seery Kearney, Currie and Maria Byrne, have said, we have been engaging with the Local Jobs Alliance. From talking to constituents who own and operate small and medium-sized enterprises, we understand there is a concern about the costs of this to the employer as well. I know I spoke earlier about the employee, and it might be said that I am riding both horses, but I am not. I am conscious of the burden we are putting on the employer while recognising we need employees as well. I am talking about people who own and operate small and medium-sized enterprises in the hospitality sector or the construction sector, including in subcontracting, and who provide services to people and in communities.

The important issue is the rebate. Before Covid, hard-pressed businesses were under pressure - bhí siad faoi bhrú - and, post Covid, they still are. There is a need to look at what the small or medium-sized enterprise gives us in its contribution to the local economy and employment. We are looking to ensure that, if possible, no additional financial exposure is imposed on them and no burden is imposed on the Exchequer. We should consider the principle of the rebate option for small and medium-sized businesses. I know the Minister of State is open to engagement.

We are talking about the convenience store, the newsagent, the grocer, the retail sector in general, the vintners, the licensed premises and the restaurants. We are conscious that in some cases these businesses operate antisocial hours. When we are all out having a good time, these people are working and providing services we avail of.

I am digressing for a moment, which I know I have a habit of doing, but part of the problem with the Dublin Airport Authority, DAA, is that to be asked to come in to work at 3 o'clock in the morning, for example, a very unsociable hour, and to perform duties in a pressurised environment requires not only great skill and great training but also proper remuneration.

I have made my point. The Minister of State knows what I am saying. I support my colleagues.

I spoke earlier to amendment No. 17. There is an important point here. We have heard Senators speak about the impact on and the cost to businesses and justify the payment of 70% of the daily rate. I remain absolutely opposed to that because low-paid workers cannot afford to go out sick on 70% of the daily rate. To pick up on something Senator Seery Kearney talked about, we know that in the childcare sector many childcare workers earn barely above the minimum wage, often just over €12 per hour. They cannot afford to be out sick and to get less than their full daily rate because they do not have any spare capacity. They need everything they earn in a week to cover their bills. We need to keep coming back to who the Bill is for. It is for low-paid workers. We are not acting in their interests by applying a 70% rate. I appeal to those Senators who justify the 70% rate to support amendment No. 17 in order that those who are paid only 70% of their daily rate at least get enough to cover the cost of going to the doctor. Those Senators have had their chance to support amendments to review the requirement for medical certification. They have chosen to say that every worker going out on sick leave should need a medical certificate on day one. I now appeal to those Senators to make sure that a minimum daily rate is set such that such workers will at least be able to cover the cost of going to the doctor. Otherwise, there is no point; they will have to go into work sick because they will earn less than the cost of going to the doctor, as we said earlier.

I will be brief because I spoke earlier. I wish to highlight something that came up at a meeting of the tourism committee today. We are talking about low-paid workers. To be clear, the call from Sinn Féin is that the full daily rate of sick pay is paid. What the Government might not be aware of is that, according to Fáilte Ireland, whose statistics I do not doubt, 68% of people who work in the hospitality sector earn less than €12 per hour. That is seven in ten workers in that sector. It is a disgraceful figure, but that is the fact of the matter. If this Bill is to work for low-paid workers, it certainly will not work if the State is to pay 70% of a rate of pay that is less than €12 an hour. We can and must do better.

I will try to cover most of the points raised. I had a note on some of the points made earlier but, for the life of me, I cannot find it, so if I do not answer some of the Senators' points, I ask them to throw them back at me and I will try to come back on them. I do not know where I put my note.

Before turning to the amendments, an issue was made earlier of amendments not being accepted by the Government. I wish to be absolutely clear that the Government does not decide which amendments are appropriate and which are not. We can speak to amendments and we can agree or disagree, but that is done independently of us. Senators can nod or wink all they want, but I am absolutely clear on that. I have no role as a Minister of State in deciding what is ruled in or out of order. The Chair might wish to clarify that. It is unfair of Members to put such comments on the record because they know I do not and cannot, as a Minister of State, decide such matters. I wish to be very clear on that. I am happy to discuss any amendment. People know that I will talk all day. I certainly would not rule anybody's amendment in or out. That is not my job.

Amendments Nos. 14 to 18, inclusive, would require sick leave to be paid at a person's full rate of pay. This is, in the Government's view, likely to have a disproportionate impact on SMEs, particularly those in the service sector. We have tried to give the greatest certainty possible to employers in setting out our plans. We cannot support these amendments. We spoke about this quite a lot earlier and on other Stages of the Bill. We understand that this is bringing in a new statutory sick pay scheme. It is an additional cost to employers. Let us be very clear about that. We can discuss different rates of pay and so on, but the cost of this will fall to employers. At the moment, employees do not have a statutory sick pay scheme in many cases. They do not have access to this at all. We want to bring this in and we believe a rate of 70% is appropriate. I have said it before and I will say it again: we can keep an eye on this, we will monitor and review it as we go along and we can discuss it because it is in regulation. I will come back to that point in a minute. We think it is important it is kept in regulation. If at some stage it is decided it should change, it is easier to do so in regulation than in primary legislation. We think 70% is appropriate to get that balance right because we value these jobs. We value the companies, no matter what sector they are in, whether childcare, hospitality, retail or any other sector. There are different rates of pay. These jobs, as well as employees, have to be protected. We look for the balance there and we believe that 70% is a balance.

As for amendment No. 17, setting an absolute minimum amount could give rise to some strange effects for employees who work short hours. For example, if a person is due to work for three or four hours, their employer could end up having to pay them more for a sick day than they would be entitled to on a normal working day. That is an anomaly put forward if a minimum amount is set. We are setting a minimum rate. The former would be a clearly unfair result, so I cannot accept amendment No. 17. In general, the regulation will deal with the 70% rate. We think it is appropriate. We will review this legislation. We have always said that. We will keep it in play and we can look at it again and focus on it if need be and if Members so wish. The legislation will provide for a replacement rate of 70% of gross salary for a duration of three working days in a calendar year, coupled with a 70% rate of pay. The application of a daily earnings cut-off point of €110 will ensure that employers do not face excessive costs and that jobs are not jeopardised. We genuinely believe we are getting the balance right on that. We can discuss this all night. We will not necessarily agree on it. It is important we discuss it.

Senator Gavan, I think, referred to a debate earlier during which I spoke about the minimum wage and said that less than 10% of the people in this country are on the minimum wage. It could be 7% or 8%. I am open to correction. I did not say they were on €12 or €13; I referred to the minimum wage. We are committed as a Government to bringing the minimum wage up to a living wage. As a country and a Government, we are setting out a roadmap on that. We are happy to pursue that over the coming years in conjunction with these Houses. It is important we do that too.

As for the costs to employers, I have engaged quite a lot with employers over the past year and a half through this discussion. The issue of replacement costs for some sectors is there already. It is not really an issue. If they are using agency workers, there might be an extra charge in that regard. That is an issue. Childcare, which has been referred to, is a difficulty. We can look at that again. Section 10 provides that if an employer can prove that he or she genuinely cannot afford to pay for this, there is a route to go down, as there is with the minimum wage.

It is not very often used, although it is there as a mechanism and it is in this legislation as well. We spoke earlier about the whole area of the extra costs on employers and getting that balance right. This is an extra cost on employers and we have to be very careful that it does not impact jobs and erode jobs. Naturally, we will be keeping that under review as well. I spoke on Committee Stage and the Tánaiste also spoke in the Dáil around trying to see if there is some way in which we could assist where we can genuinely see employers are under pressure.

With regard to the amendments in the group, speakers referred to the Local Jobs Alliance. My understanding from some of the correspondence is that this focuses beyond the three days. When it increases to the five days and eventually to the ten days that we are committed to, that becomes a major issue for them. Some say they could probably handle the three-day cost but as it goes to five days, seven days and ten days, it becomes a major cost. It is something we should continue to engage on. I cannot commit to making changes here but we have said we will look at this.

Similar to the conversation earlier around the 70% and the maximum of €110, we are trying to get the balance right. We think a gradual increase over four years makes it doable for businesses and they would accept that. If we brought in the ten days straightaway, which would be extreme, it would put extreme pressure on businesses and the SME sector. It would not be manageable and would jeopardise jobs. We have tried to bear in mind the pressures the sector has been under for the last couple of years and the current high-cost environment. It is a difficult time. Bringing it in in stages over four years is appropriate and should ease it in for businesses.

We recognise this is putting extra costs on businesses and it is something we will keep under review. As the Tánaiste said before and I will say again, we will monitor this to see if we need to work with the various sectors to bring in some sort of assistance. That is something we will deal with as we go along. We think we have the balance right but I am aware some sectors are under a lot of pressure to absorb these costs. I have made the case that for smaller businesses, any increases in costs, even in the minimum wage alone, can take a few thousand euro off profits at the end of the year, and those profits might not be excessive and they might even be taken from the wage of the employer. We are conscious that they cannot always pass on the costs.

Likewise, the sick pay scheme is increasing costs. We will commit to reviewing that. This was raised on Committee Stage and we said we would track it to see if there is a way to deal with it. Similar to the cost of healthcare and the cost of a GP, it is possibly a conversation that is outside this legislation and it might be had through our business development agencies and jobs agencies, and it would have to be discussed across different Departments. We have held the view that it does not really belong in this legislation. Nonetheless, I understand what the ask is and that there should be assistance. It is very similar to the ask to reduce the costs of a GP. We are all trying to get a balance. As we pursue reducing the cost of access to a GP, on one side, which I would say does not belong in the legislation, on the other side, supports for businesses and SMEs are something we have to work on as well. Many supports are provided by the taxpayer through all of the various agencies and through the Department to assist businesses and jobs, but that discussion might not belong in this legislation. I hope that is of assistance.

On the last point, I do not know why the Senator said the legislation is written assuming that someone is not going to be sick. That is not written anywhere in the legislation. The Senator made a comment earlier around the 70% that it is as if we are assuming somebody is not sick and is looking for this. We are not assuming that at all and I want to be very clear on that. The legislation in no way gives that impression.

The Minister of State should be given credit for the way in which he supports small and medium enterprises. It is important that the Government offers support to small and medium enterprise owners and employers because they are the backbone of our communities. Without them, we would have a very different economic outlook today.

On the wider picture of the summer economic statement and the forthcoming budget, I made the point that it is incumbent upon us in this House, even though we have no direct role in the budget itself, to have a debate in advance of the budget. Sometimes, all we hear is a particular voice shouting and articulating a particular proposition but, on the whole, we, as a Government, need to look out for and support small and medium enterprises – I note that Senator Casey is an employer too. We saw what happened with Covid and we have seen this in other parts of the world with regard to enterprise. We need to be pro-enterprise. The Minister of State and the Tánaiste have been very proactive around small and medium enterprises and we need to keep that going.

There is a balance that needs to be struck. We need to have the support of the people I and other speakers have mentioned. Senator Seery Kearney made reference to childcare, as did Senator Sherlock. It is important that we also have this discussion. As a former Chairman of the committee dealing with children’s affairs, I know that is an area we need to go back to in terms of offering further supports. To be fair, Senator Seery Kearney has been very proactive on the childcare industry in this House and in the committee.

This Bill and the next Bill on the schedule today are two good bills for workers, and we should not forget that either.

I move amendment No. 15:

In page 7, line 8, after “day” to insert “, which shall be their full daily rate”.

I move amendment No. 16:

In page 7, line 11, after “may” to insert “equivalent to their full daily rate of pay”.

I move amendment No. 17:

In page 7, to delete lines 12 and 13 and substitute the following:

“(a) specify the percentage rate of an employee’s pay, subject to-

(i) a maximum daily amount, and (ii) a minimum daily amount, at which statutory sick leave payment will be paid,”.

I move amendment No. 18.

In page 7, to delete lines 14 to 17.