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Sick pay will serve up job losses, ISME

Friday, October 12 12:15:49

A major survey of SMEs carried out by ISME has confirmed that the proposal by Minister Burton to introduce mandatory sick pay of four weeks for employers will have a disastrous impact on competitiveness, jobs and absenteeism levels in the small and medium business sector.

Out of the 2,068 businesses surveyed, an overwhelming 96 per cent feel that implementing such a measure will incur job losses, while 94 per cent believe that both their cost base and levels of absenteeism would increase where sick pay to become mandatory for four weeks. 85 per cent of surveyed SME's do not have an existing sick pay plan written into employment contracts.

"To even begin to suggest that business pick up the tab for employee absenteeism in the current environment quite clearly shows that Minister Burton is living in 'cloud cuckoo land' and has no idea of how businesses are struggling on the ground during the worst recession in modern times," said ISME CEO Mark Fielding. "To further add to costs when businesses are struggling to stay afloat, maintain and create employment, is daft. It is as if the Minister has a 'death wish' for the small business sector".

Mr. Fielding also felt that levels of absenteeism and sick pay in SME's contrast favourably with those in the public sector.

"The typical number of days lost per annum, due to absenteeism in SMEs, is 3 days and well policed, contrary to the Minister's assertion. This compares to a massive inefficient '12 days plus' in the public sector, where the employer (the State) pays sick pay. We know that civil and public servants are not more susceptible to illness than private sector employees, therefore logic dictates that the massive differential is a result of the free availability of a 'sick pay scheme' and the lack of management of absenteeism in the public sector," he added.

"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. The Minister would be far better off tacking the huge level of absenteeism within the public sector and the inefficiencies within her own department before penalising businesses any further. We should be working together to sustain and create jobs, not fighting mad-cap costly proposals, which have the opposite effect".