Thursday, 12 July 2012
Sick Pay Scheme
Question 4: To ask the Minister for Jobs; Enterprise and Innovation his liaisons with the Department of Social Protection on possible changes to the system of sick pay and employers PRSI; if he considers that any such changes would impact on competitiveness and employment; and if he will make a statement on the matter. [34246/12]
Any proposals for changes in the sick pay scheme or to employer PRSI are budgetary matters which will be considered in due course by the Government. Any such consideration will include a thorough examination of the proposals, having regard to the overall impact of the measures proposed. The Minister for Social Protection initiated a consultation process earlier this year on the feasibility and implications of introducing a scheme of statutory sick pay. Forfás and representatives from my Department attended the consultative seminar held by the Department of Social Protection, along with a number of business representative organisations. I understand that the Minister for Social Protection recently published a report on that consultation seminar.
Proposals for a statutory sick pay scheme would affect competitiveness and employment. The evidence of this impact will need to be weighed against the potential for savings in terms of reduced absence due to sickness. I will therefore carefully scrutinise any proposals which develop from this consultation phase and their impact on jobs and competitiveness and contribute fully to the budgetary process within the Government.
I take it from the Minister's reply that his officials attended a presentation on an information campaign organised by the Minister for Social Protection. However, I am inundated with correspondence from small employers who are hanging on by their fingertips and who are extremely worried about proposals emanating from the Department of Social Protection, whose Minister is saying there is a compelling case to increase employer's PRSI and load more of the sick pay bill onto the backs of employers. This is affecting their planning and business and it is creating an air of uncertainty. Does the Minister agree that, with the current levels of unemployment and emigration, the last kinds of solutions we need are proposals to add to the cost of employing somebody, in view of the fact that the average cost of employing somebody in Ireland is still approximately 20% higher than the average among the 27 EU member states. Does the Minister not agree that increased costs are the last solutions we need and that it would be better if this discussion were not ongoing?
Every proposal needs to be examined carefully. Evidence suggests that small employers manage absence through illness extremely well and that the highest rate of sick leave is in the public sector. We need to look across the board at this issue. The Minister for Social Protection is undoubtedly correct that there has been considerable growth in long-term dependence on welfare owing to sickness. We need to examine the causes. This is the background to this debate. There is no doubt the Deputy's concern, namely, that there will be a disproportionate impact on small business, needs to be examined. The truth is that most small businesses do not have sick pay schemes of the sort operated by larger employers in the public service. There are serious issues to be examined, including the impact on the cost of employment. There is serious concern about the extent of dependence on long-term sickness welfare schemes, and we need to examine ways in which to reduce this.
I agree with the Minister's last point but the answer is surely not to solve the problem by loading more costs on the backs of employers, which will inevitably create more unemployment and put more pressure on the social insurance fund. The Minister said in reply to question No. 2 that one of the centrepieces of the Government's employment strategy is the halving, in certain instances, of employer's PRSI. If this is the centrepiece of its policy for creating jobs, does any proposal to increase PRSI, for whatever reason, not fly in the face of it?
The Deputy is seeking to have me comment on a number of issues that will be discussed in the context of the budget. The matter will be dealt with by the Government by weighing up the evidence in due course. There is no doubt we ought to be extremely careful about anything that adds to the cost of employment. We must ask whether any proposed measure will be effective in reducing absences and dependence on welfare. There are serious issues to be addressed. As I stated in my reply, I will be contributing very much in this regard and examining carefully and evaluating the potential impact on small business and employment. Any decision will have to be taken in a balanced way, bearing in mind all the issues that arise.