The Labour Court has reversed a WRC decision on statutory sick pay in Ireland, confirming that employers with more favourable company schemes are exempt. This ruling highlights the complexity of sick pay compliance and why getting your policy documentation right matters Read more
Statutory sick pay in Ireland has been a source of confusion for employers since the Sick Leave Act 2022 came into force. A recent HRHQ report on a Labour Court ruling has brought one of the Act’s most misunderstood provisions into sharp focus: the exemption for employers who already operate a more favourable sick pay scheme. The Labour Court overturned a WRC adjudication, confirming that the employer in question was indeed exempt. It is the first successful appeal of its kind under the Act, and it carries real lessons for every employer in Ireland with an existing company sick pay policy.
The Labour Court has confirmed that employers whose company sick pay schemes are, taken as a whole, more favourable to employees than the statutory minimum are exempt from statutory sick pay obligations. The WRC had initially ruled against the employer, but the Labour Court reversed that decision on appeal. If you have a company sick pay scheme, you need to know whether it genuinely qualifies for this exemption.
Under the Sick Leave Act 2022, employees are entitled to a set number of days of employer-paid sick leave each year (currently 5 days, paid at 70% of normal daily earnings up to a cap of €110 per day). The Act was designed to establish a statutory floor, particularly for workers in sectors where no company sick pay existed at all.
However, the Act also includes an exemption. Where an employer already provides a sick pay scheme that is, on the whole, more favourable than the statutory entitlement, the employer does not have to provide the statutory sick pay on top of it. The two are not meant to be cumulative.
In this case, an employee brought a complaint to the WRC, arguing the employer had failed to provide statutory sick pay. The WRC upheld the complaint. The employer appealed to the Labour Court, arguing that its existing scheme already exceeded the statutory minimum. The Labour Court agreed with the employer and overturned the WRC decision.
This is a significant outcome. It confirms that the exemption works in practice, but it also highlights just how easily an employer can end up defending a WRC claim over a provision they believed was clearly in their favour.
On paper, the exemption seems straightforward: if your scheme is better, you are exempt. In practice, the comparison is anything but simple. The statutory scheme has specific parameters: a set number of days, a defined payment rate, a daily cap, a qualifying period of 13 weeks’ continuous service, and a requirement for medical certification. Your company scheme needs to meet or beat these across the board, taken as a whole.
Here is where employers run into trouble. A company scheme might offer full pay for sick days, which sounds more generous. But if the scheme only kicks in after 12 months of service rather than 13 weeks, is it still “more favourable” for a newer employee? What if the scheme pays 100% of salary but only covers 3 days per year instead of 5? What about schemes that require a waiting day before payments begin?
The comparison is not a simple line-by-line exercise. It requires a holistic assessment. And as this case shows, the WRC and the Labour Court can reach completely different conclusions when applying it. That alone should give employers pause.
In our experience advising employers across multiple sectors, we frequently encounter company sick pay policies that were drafted years before the Sick Leave Act 2022 existed. They were never designed to withstand a side-by-side comparison with a statutory scheme. Our team at Purpletree regularly reviews and updates sick pay policies specifically to address this gap.
The headline is that the Labour Court reversed the WRC. For employers, the more uncomfortable truth is that the WRC got it wrong in the first place. An employer with a legitimate exemption was found non-compliant at first instance. That employer then had to go through the cost, time, and stress of a Labour Court appeal to vindicate its position.
This is not a criticism of the WRC. Adjudication officers handle thousands of cases and the Sick Leave Act 2022 is still relatively new legislation. But it does underscore a reality that many employers underestimate: being right is not enough. You also need the documentation, the policy wording, and the evidence to prove it at every stage of the process.
A situation we see frequently is employers who know their scheme is generous but cannot demonstrate it clearly in writing. The policy might be informal, or it might be buried in an employee handbook that has not been updated since 2019. When a WRC complaint lands, the employer scrambles to put together a comparison after the fact. That is a weak position to be in.
If your business operates its own company sick pay scheme, this ruling should prompt three questions.
First, does your scheme actually qualify as “more favourable” under the Sick Leave Act 2022? This is not a question you should answer yourself. The holistic comparison requires careful analysis of payment rates, qualifying periods, number of days, certification requirements, and how your scheme treats different categories of employee. Our HR audit service includes a full review of sick pay compliance as standard.
Second, is your scheme documented clearly enough to withstand scrutiny? A verbal understanding or a loose policy paragraph will not hold up at the WRC. The policy needs to set out the terms precisely and explicitly reference the statutory exemption. When we guide clients through this process, we ensure the wording leaves no room for misinterpretation.
Third, are you applying the scheme consistently? Inconsistent application is one of the fastest ways to undermine an exemption claim. If some employees receive the company scheme while others are put on the statutory minimum depending on their manager or department, that creates exposure. Consistency in application matters as much as the policy itself.
The Sick Leave Act 2022 originally envisaged a phased increase in statutory sick pay entitlements, rising from 3 days in 2023 to 5 days in 2024 and further increases in subsequent years. The Government has deferred some of these planned increases, and employers should check workplacerelations.ie for the latest confirmed entitlements for 2026.
Each time the statutory floor changes, the “more favourable” comparison changes with it. A company scheme that comfortably exceeded the statutory minimum when it was 3 days might look less generous once the entitlement reaches 7 or 10 days. Employers cannot simply set and forget their sick pay policies. They need to be reviewed against the statutory baseline each year.
This is one of the operational complexities that catches employers off guard. The Sick Leave Act is not static, and neither is the compliance obligation. Our employment advice team monitors these legislative changes and proactively updates client policies so employers do not fall behind.
There is a payroll dimension to this as well. Under the Act, employers are required to keep records of sick leave taken and payments made. Even if you are relying on the exemption, you still need to track absences and demonstrate what was paid under your company scheme. Failure to maintain adequate records can result in a WRC complaint going against you simply because you cannot prove what happened.
For employers managing payroll in-house, this creates an additional administrative burden on top of PRSI, Revenue submissions, and all the other moving parts. Our payroll service integrates sick pay tracking with broader payroll compliance, so nothing falls through the cracks.
This Labour Court decision reinforces a pattern we see across employment law in Ireland: the rules look simple on paper, but applying them correctly requires specialist knowledge and ongoing attention.
For our clients, we handle the full scope of sick pay compliance. That includes drafting and reviewing company sick pay policies, conducting the “more favourable” comparison against the statutory baseline, ensuring record-keeping meets WRC standards, and representing employers if a complaint is lodged. We do this as part of our broader HR Essentials service, so sick pay sits alongside the rest of your employment compliance rather than being managed in isolation.
If this ruling has prompted questions about your own sick pay arrangements, get in touch with our team. A short conversation is all it takes to identify whether your scheme needs attention.
Yes, but only if your company scheme is, on the whole, more favourable than the statutory entitlement. This is a holistic comparison that considers payment rates, number of days, qualifying periods, and other terms. The Labour Court has now confirmed this exemption applies in practice, but the burden of proof rests with the employer.
Employees are currently entitled to 5 days of statutory sick pay per year, paid at 70% of normal daily earnings up to a maximum of €110 per day. The employee must have at least 13 weeks of continuous service and provide a medical certificate. The Government originally planned further annual increases, but these have been subject to review. Check citizensinformation.ie for the latest confirmed entitlements.
You have the right to appeal a WRC adjudication to the Labour Court. As this recent case demonstrates, the Labour Court can and does reverse WRC decisions. However, an appeal requires preparation, evidence, and a clear presentation of your position. Having professional representation and well-documented policies significantly strengthens your case.
Yes. The Sick Leave Act 2022 requires employers to maintain records of sick leave regardless of whether they rely on the exemption. Poor record-keeping can undermine your position if a complaint is brought, even if your scheme is genuinely more generous than the statutory minimum.
This article is for general informational purposes only and does not constitute legal advice. Employment law is complex and fact-specific. For advice on your specific situation, contact the Purpletree HR team directly.
Our team of HR specialists advises Irish employers on exactly these issues every day. Get in touch for a confidential conversation.
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