Ms Maeve McElwee:

I will take the Deputy's questions from the beginning. He asked which sectors might be most affected. We will see it in many sectors, including in our experience economy, which has been hugely impacted by Covid. The introduction of sick pay schemes there will undoubtedly create an additional burden of cost. Any businesses that do not have sick pay schemes will feel the cost but our experience economy will be hardest hit. It is also coming into its most difficult trading period early next year and there are huge challenges around the sector at that time of the year anyway and putting this on top of that provides a significant cost. There are other sectors across the board where we know that wages tend to be set at a particular rate, whether that is the national minimum wage or whether there are sectoral employment orders or joint labour committee rates in place. There will also be a requirement for us to look at how we will realign all of that so there is a significant impact across those sectors as well.

There are a couple of things to look at in the issue the Deputy raised around replacement costs and employers having to replace costs. We also have a significant challenge in respect of the availability of labour in all sectors. Not alone is it difficult to replace individuals but it is expensive to replace them. We also have considerable challenges in the negative context and climate around short-term work contracts and agency working, whereas in fact they are an important part of our workplace flexibility. The ability of employers to offer and appropriately provide statutory entitlements like sick pay, carer’s leave and parental leave relies on that flexibility. It is important that we do not perpetuate the negative narrative that these are poor employment options. They often provide a first step in the door for many individuals but it is difficult and costly to replace skills that are particularly unique. Where you might have somebody in a stand-alone role, there is an additional cost. That person will have to be replaced; otherwise the company bears the cost of either lost production or significantly reduced production over time. Employers that are not paying sick leave already bear that replacement cost or productivity loss but now they will also in many cases bear the productivity loss or cost, which is excessive in many cases, and the statutory sick pay cost as well. The more days that are introduced as we move through the system, the more costly that can become in the long term.

Looking at how sick pay schemes operate, the vast majority of members who we have surveyed tell us they have waiting days in place.

There is initially going to be a service element. Most employers do not start incorporating people into sick pay schemes until they have passed their probation, which is typically six months. After that, there will be service days and, therefore, there are waiting days where people can take a couple of days' sick leave without the requirement to be paid but also without the requirement to produce any certification for those particular days. They are still considered to be authorised leave, however. They are out sick and that is recognised.

When we look at organisations and how sick pay works, however, the Deputy is quite right. Employers see sick leave as being a benefit. They see it as an opportunity to attract people to their organisations where they can afford to put something in place. It is not just larger companies. Many smaller companies offer sick pay benefits to their employees where, again, they can afford it.

The challenge, particularly with this proposed Bill, is that in terms of offering a benefit, it often has to be managed so that it is not actually just a right, it is a benefit of one's employment and it operates to be beneficial and fairly and effectively. There is nothing that employees hate more than that sense that people are getting away with stuff where others are operating very effectively. We know that the unions support and have always supported employers on this piece. As a result, it will be critical to look at sick pay schemes and say that almost every existing sick pay scheme has a disqualification cause; a reason to say that an employer is not actually operating the scheme fairly and we are disqualifying them from it. There will be clauses within it which state that the company will review a person's sick leave if it feels that there is a pattern to it or that there is an ongoing problem with the potential to be able to restrict a person's usage of it.

There are abuse clauses, as there are in other items of statutory legislation, relating to people who it is felt are not operating it in line with the principle that it is there to support. All those things are very important clauses in the context of sick pay. Then there are other situations where organisations will run sick pay. There will be issues around whether a person will be eligible to earn a bonus, what schemes are in place and other company benefits that will be dependent on sick pay, particularly where the sick pay is going to be put on a statutory leave footing and how that will interact with other company benefits and schemes, such as, for example, those relating to attendance bonuses. Were we to suggest that a person is not deemed to be absent on a day that he or she is on statutory sick leave, how will that have an impact? There is much complexity regarding how sick leave schemes operate within the environment at present.

On the Deputy's final point to the effect that big companies can well afford it, big companies that have put in place sick pay schemes can afford the schemes they have budgeted for and are operating. If we are now layering on additional costs, that will be challenging for many organisations if we are now referring to day one and, again, the lack of clarity around section 9 as to whether it is better in the round or on the whole and how that will operate may actually increase costs. The last thing we want to do is to be seen through statutory legislation to drive a race to the bottom where employers step back and say they have actually put in place some significant benefits for employees, including sick pay but often many other benefits. If this is layered on top and represents an additional cost, employers may say they are able to afford it but are being penalised for putting more favourable policies in place because everything that comes a statute is now layered on top of it instead of being taken in the round, which I think the proposed Bill is trying to do. That really needs to be made clear because, otherwise, employers will retrench and say that if the cost is going to be added on, they have to be sure and have some certainty regarding what the cost will be. If, therefore, there are no management clauses in the legislation and no overarching ability to be able to say that an employer has something that is better overall, then employers, quite reasonably, will rely on the legislation and say that that is what they will implement.