Tom Fleming (Kerry South, Independent) | Oireachtas source

The proposed statutory sick pay scheme amounts to nothing more than an extra tax on employment at a time when reducing costs and creating jobs should be the priority. Forcing employers to pay an additional €85 million to cover the costs of up to four weeks sick pay will make the country less attractive for investment and erode some of the hard won competitiveness gains made in recent years. By international standards, the cost of employing people in this country is already too high. The Government’s proposal will only make matters worse. The suggestion that Ireland is out of line with international practice on sick pay is misleading. Employers already pay 75% of the money that goes into the social insurance fund which covers sick pay benefit. In 2010 this amounted to €5 billion. The current proposal will make employers actually pay on the double.

International comparisons also need to recognise that Ireland’s employer's PRSI rate of 10.75% has no cap on the employer’s contribution. The rate applies to all income, unlike in the United Kingdom, for instance. The transfer of social welfare costs on to employers will force many of them to eliminate or reduce current sick pay benefits where these are being paid. It will also mean other cost-cutting measures will have to be implemented and employment will be reduced. It will put jobs at risk and add further pressure to an already stressed social welfare system, the last development the economy needs at this time.

Absenteeism already costs small firms much as they incur significant costs, including voluntary sick pay top-up, medical referrals, overtime payments, as well as the effect on quality and productivity. The proposal is also at odds with the Government’s Action Plan for Jobs which states one of its aims in making Ireland more competitive is to reduce the cost of employment to employers. There is a need for a rethink about this proposal. Many small businesses, whether it is a shop or a family business, have their backs to the wall with impediments in their way to survive. One only has to look at the hotel sector which gives sizeable employment, but many hotel rooms lie idle. We do not need to contract conditions even further.

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