Public Sector Sick Pay Changes

Peninsula Team

July 27 2012

In what will be regarded as a landmark step in Public Sector Reform, The Labour Court Chairman, Mr. Kevin Duffy, issued a recommendation on Friday 20thJuly that from Public Sector Sickness Benefit will be halved from January 2014, affecting some 300,000 public servants.

Current Sick Pay Scheme

The Government is seeking to reduce the public service bill for sick pay which cost the State around €550m last year with €63.1m of that total arising from illness which is uncertified by a doctor. Currently under the present scheme, public servants are entitled to Sickness Benefit of six months on full pay followed by six months on half pay within any period of four years. After exhausting the first year of entitlements, they go onto a lower rate known as “rehabilitation pay”.

New Sick Pay Scheme

However, following the recommendation on the 19th July 2012 that from January 1, 2014, the sickness benefit entitlement will be halved to three months full pay and three months half pay. Furthermore, un-certified sick leave is to be cut from seven days in any year to seven days over a rolling two year period. Brendan Howlin, the Minister for Public Expenditure and Reform, has stated that this will take effect as soon as practicable according to reports. Mr Duffy described the change as “one of major significance from the perspective of the State as an employer”. However, he also called it “reasonable and modest” compared to entitlements in other employment.

Government Welcome the Recommendation

Brendan Howlin, the Minister for Public Expenditure and Reform, when interviewed welcomed the recommendation and has said it would “pave the way for the introduction of a completely reformed new sick leave scheme for the public service”. Mr. Howlin further stated that “reformed sick leave arrangements in the public service will result in increased productivity, reductions in absenteeism and a significant reduction in the cost of sick leave in the public service… For most employees in the public service the new arrangements will mean that the amount of paid sick leave which they may be granted will be halved. It is essential that we strike a balance so that those who are genuinely and seriously very ill should be given reasonable protection by their employer, and so for that reason I proposed the introduction of a critical illness provision.

Mr. Howlin went on to add that “while the reduction of the maximum amount of sick leave granted is critical the effective management of absenteeism is a central element of the HR reforms. The key challenge now for each of the sectors in reducing absenteeism is to engage line managers in the proactive management of sick leave.”

Critical Illness

The new recommendation also states that people experiencing “critical illness” will still be entitled to six months full pay and six months on half pay. It says critical illness cover should be regarded as an exceptional and normally non-recurring occurrence. The Labour Court has acknowledged that management has discretion to decide how this is applied – but recommended further talks with unions to agree a protocol including an independent appeals mechanism on how that discretion should be exercised.

Rehabilitation Pay

The Labour Court also recommends reform of rehabilitation pay – a lower rate of sick pay which applies when standard sick pay entitlements are exhausted.


This is sure to be a much publicised and discussed issue, with Unions likely to have their say, however the issue of Sickness Benefit seems to be close to the top of the Government’s list of priorities, with Joan Burton already having announced intention to make employers pay for the first four weeks of any sickness absence. It is highly likely we will hear more on this subject in the weeks to come.

Employers should seek advice from Peninsula Business Services when faced with any employee situation. Please phone the 24 Hour Advice Service on 01 8555050 and one of our experienced advisors will be happy to assist.

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