Q & A on working time and sick pay developments

Q & A on working time and sick pay developments

Q & A on working time and sick pay developments

Deirdre Crowley has addressed some frequently answered questions in relation to the area of working time in a questions and answers format, as follows:

1.  Is payment in lieu of annual leave authorised where an employee leaves the company?

Yes, by virtue of Article 7.2 of the Working Time Directive, which states ‘

[t]he minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated’. This is the only time in which a payment in lieu of annual leave is allowed under the Working Time Legislation. The Government issued Organisation of Working Time Act 1997 Explanatory Booklet on Holidays and Public Holidays for Employers and Employees states that it is illegal to pay an allowance in lieu of the minimum statutory holiday entitlement of an employee unless the employment relationship is terminated.

2.  In payment for annual leave, should this include care allowances/on call allowances/housing subsidies?

SI No 475/1997 – Organisation of Working Time (Determination of Pay for Holidays) Regulations 1997 (the “Holiday Pay Regulations”), at section 3, sets out the basis of calculation, for the purpose of the Organisation of Working Time Act 1997, of the normal weekly rate of an employee’s pay. It states that the sum that is paid in respect of the normal weekly pay includes any regular bonus or allowance the amount of which does not vary in relation to work done by the employee, but excluding any pay for overtime. Therefore if the allowances or subsidies are amounts that do not vary it is likely that this should be included in the calculation. In addition, it should be kept in mind, following recent CJEU decisions (Williams and Others v British Airways, Lock v British Gas Trading Ltd and Others), that if there is an intrinsic link between the allowances and the work that the employee is required to do then it is likely to be included in the calculation of annual leave payment. It may also depend on the terms of the contract of employment and so this should be reviewed in detail when determining whether or not such allowances/subsidies are included in the calculation of payment for annual leave.

3.  Can we insist that employees take annual leave? Employees in our company are bad at taking annual leave so they end up having a big balance at the end of the year.

The Government issued Organisation of Working Time Act 1997 Explanatory Booklet on Holidays and Public Holidays for Employers and Employees states that it is the responsibility of the employer to ensure that the employees take their full statutory leave allocation within the appropriate period. Section 20 of the 1997 Act states that annual leave must be given to an employee within the leave year or, with the employee’s consent, within 6 months of the following leave year. Therefore an employer should ensure that employees take this statutory leave, unless they are prevented from doing so by illness, in which case a 15 month carry over period applies, by virtue of section 86(1) of the Workplace Relations Act 2015.

In respect of annual leave in excess of the statutory entitlement, the Explanatory Memorandum states that employees may, with the consent of their employer, carry over holidays in excess of the statutory minimum leave to a following leave year. Most employers require their employees to take their annual leave entitlement within the leave year. Some employers allow employees to carry over leave into the next year subject to certain conditions, e.g. a maximum of 3 days to be taken within a specified period of time or only in exceptional circumstances. An employer should ensure that the contract of employment or the staff handbook contains an appropriate clause to deal with this. If the contract and/or policies are silent on the issue of carry over or, as it appears to be the case here, there is a custom and practice of carrying over large amounts of annual leave, then any change in this practice will require consultation with and notice to the employees before any changes are implemented.

4.  Regarding sleepovers, if an employer has a room and the employee is free to go to bed but is available to be called during the night, should that employee not be rostered for at least 11 hours after the sleepover shift ends?

Yes, the terms of the Organisation of Working Time Act 1997 and the outcome of the recent HSE v  IMPACT decision (HSE v IMPACT, SIPTU and UNITE – Recommendation No LRC 20837) means that even where an employee is free to go bed during rostered hours typically described as sleepover duty, the employee cannot be rostered for at least 11 hours after this sleepover shift ends.  Following the recent HSE v IMPACT decision, it is clear that sleepover time is working time and accordingly the provisions of the Organisation of Working Time Act 1997 in respect of rest periods should be observed. Under section 11 of the 1997 Act, an employee is entitled to a daily rest period of at least 11 consecutive hours. It should be noted that there is an exemption regarding minimum rest periods in section 4 of the 1997 Act where an employee is changing shifts which may be relevant depending on the specific details.

5.  Can you explain what compensatory rest is, as per the Organisation of Working Time Act 1997? Is it paid? Can it be used routinely?

Sometimes employers can be exempted from providing rest periods as set out in the 1997 Act, provided the employee is given equivalent compensatory rest. Exempted employees who lose out on their statutory rest entitlements should receive compensatory rest as soon as possible afterwards. Section 4 of the 1997 Act sets out the exempted employees to whom this may apply and section 6 provides guidance in respect of compensatory rest. There is also the Code of Practice on Compensatory Rest (Organisation of Working Time Code of Practice on Compensatory Rest and Related Matters) (Declaration) Order 1998 which provides practical guidance. The legislation does not refer to employees who could routinely have compensatory rest applied to them, so the obligation to assess whether routine application of compensatory rest is appropriate or otherwise, rests on an employer.

Section 6(1) of the Act applies to circumstances:

  • Where regulations (see the General Exemption Regulations S.I. No 21 of 1998) exempt certain activities from rest breaks, daily and weekly periods;
  • Where collective agreements providing for a similar exemption have been concluded by the parties and approved by the Labour Court.

In the above instances, where statutory rest times are varied, the employer concerned must ensure that equivalent compensatory rest is made available to the employee.

Section 6(2) of the Act applies to circumstances:

  • Where shift workers who change shifts and cannot avail themselves of the rest period are exempted (in respect of daily and weekly rest periods);
  • Where persons employed in activities consisting of periods of work spread out over the day are exempted (in respect of the daily and weekly rest periods);
  • Where employers are exempted from the obligation to provide daily and weekly rest periods and rest breaks as provided for in sections 11, 12 and 13 of the Act due to exceptional circumstances on in an emergency or otherwise the occurrence of unusual and unforeseen circumstances beyond the employer’s control.

Where the statutory rest times are varied in any of the circumstances mentioned above, the employer must ensure that the employee has available to himself or herself:

  • Equivalent compensatory rest; or
  • Where this is not possible for objective reasons appropriate protection of the employee’s rights. It should be noted that this, appropriate protection does not include monetary compensation or the provision of some other material benefit to the employee, other than the provision of such a benefit as will improve physical conditions under which the employee worker or amenities or services available to the employee while he is at work. Therefore an employee cannot be paid in lieu of compensatory rest.

6.  Parental Leave – where both parents are employed by the same employer do they get 90 days parental leave each or 90 days between them?

Each parent is entitled to 18 weeks of parental leave per child. In addition, in the case of parents who work for the same employer, section 6(7) of the Parental Leave Act (as amended) provides that where both of the parents of the child are entitled to parental leave in respect of the child and where they are both employed by the same employer, either parent shall be entitled to the parental leave of the other parent or may transfer any part, not exceeding 14 weeks (as set out in SI No 81/2013 European Union (Parental Leave) Regulations), of the period of his or her parental leave to the other parent. Therefore in a case where both parent are employed by the same employer the maximum amount of time that any one parent may take as parental leave is 32 weeks of parental leave, assuming that the other parent has transferred a maximum of 14 weeks parental leave to them.

It should be noted that the Family Leave Bill proposes to consolidate existing family leave legislation, which includes maternity leave, parental leave, adoptive leave and carer’s leave. Currently the provisions in respect of these leave entitlements are set out in various Acts but the Family Leave Bill proposes to consolidate these leave entitlements into one piece of legislation. In addition, the Minister for Justice, Frances Fitzgerald has confirmed that the principles of statutory paternity leave and shared leave between mothers and fathers will be looked at in drafting this Bill. It is not clear at this stage whether or not any changes to parental leave are proposed. Currently, publication of the Bill is expected in early 2015

7.  We have different entitlements to sick pay throughout the company due to integration. Is this an issue?

This issue is most probably an IR issue as distinct from an employment law issue if it is true to say that employees’ rights have been honoured at the time of any integration or transfer to your company. Compliance with the full ambit of employee rights on a transfer is a big assumption to make however as the consultation duties associated with any transfer can be onerous. In our experience, employers tend to seek to engage in consultation after an integration or transfer to ensure that employees understand why they earn less by way of sick pay than a comparator performing the same or similar work. Often, consideration is given by an employer to regularising terms in the interests of IR harmony, if that is financially possible.

It is possible that inconsistent sick leave entitlements may cause an issue over time and this often leads to employees who have less favourable sick pay entitlements seeking to claim increased entitlements on the basis of custom and practice in the company. If the company decides to make a change to the sick pay entitlements to ensure conformity throughout the company, then it is important that careful consideration is given to contractual terms, policy drafting and consent through consultation.

For further information, please contact Deirdre Crowley at dcrowley@crowleysolicitors.ie.

This article is a general summary on the subject and is not intended to be a thorough review or a complete statement of the law. Specific legal advice should be sought on a case by case basis.