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Sick Pay

Mandatory sick pay "will lead to job losses and absenteeism"

That is according to the business owners who took part in a survey for ISME, who said that mandatory sick pay of four weeks will have a “disastrous effect” on businesses.

BUSINESS OWNERS HAVE said that mandatory sick pay will lead to job losses and absenteeism.

That is according to a major survey of members carried out by ISME, the Irish Small & Medium Enterprises Association.

The survey confirmed that the proposed mandatory sick pay of four weeks for employers will have a disastrous impact on competitiveness, jobs and absenteeism levels, ISME said.

The survey was carried out last week and involved 766 respondents.

According to the results:

  • 93 per cent of companies anticipate job losses.
  • 90 per cent of companies outlined that their cost base would increase if the proposal is introduced.
  • 72 per cent of companies feel that absenteeism levels will increase with only 3 per cent expecting a reduction.
  • 75 per cent of SMEs do not have a sick pay scheme in place.

Commenting on the results, ISME CEO Mark Fielding said that the survey” clearly indicates SME opposition to a plan that will put further pressure on costs, will lead to increased absenteeism and will result in the loss of thousands of jobs, adding to exchequer costs”.

He said that the typical number of days lost per annum due to absenteeism in SMEs is three days and well policed.

It is estimated that the business cost of the measure will be an additional €150m per annum, but this fails to take into account increased absenteeism and loss productivity, said ISME.

Fielding questioned where Minister Joan Burton, who proposed the sick pay, thinks that businesses will find the money to pay sickness benefit on top of replacement pay.

In conclusion Fielding said that the government:

is supposedly promoting and encouraging enterprise and job creation on the one hand while, on the other, this ‘mad-cap’ proposal is a definite ‘job-killer’ creating an atmosphere of uncertainty among the small business community, which is stymieing business activity, investment and employment creation.

He said the proposal to introduce a mandatory sick pay scheme should be ‘binned’.

Comments from the participants in the survey included:

These proposals are definitely stopping me from hiring a new employee in the coming months.
Small companies would be unable to fund the new proposals.

We had a sick pay scheme of 12 weeks but when thing got bad we had no choice to stop it. When we stop we had a 90 per cent drop in our absenteeism.
I had to introduce a “no sick pay” policy last year. Absenteeism has reduced hugely.
This proposal will make it impossible for small businesses to function. It will increase absenteeism and bottom line costs. In our case we will downsize our business to one or two key employees and family members. We had a sick pay scheme where we paid 7 days per year. Everybody took 7 days.

Read: Small firm workers take few sick days – survey>

Read: Employers slam Burton plans to make them cover sick pay>

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