BUSINESS GROUPS have heavily criticised plans by Minister for Social Protection Joan Burton to transfer the cost of the first month of an employee’s sick pay from the State to employers.

The proposal, which would save the exchequer €150 million a year, was also criticised by Government Senator Fidelma Healy Eames, who said she had a difficulty with the Minister’s plans. “Biting off the hand that feeds us kills jobs,” she tweeted yesterday.

Ibec raised its concerns in talks with the Minister yesterday. The meeting had been arranged to discuss other issues, but was dominated by the Minister’s plan to make employers bear part of the cost of social welfare cuts.

Ibec representatives told the Minister her proposal would amount to a tax on employment and ran counter to the Government’s stated policy on job creation.

“The effect of this is to say that if you are a small employer you’re going to have to take on an additional cost when you can least afford it,” said Ibec human resources services director Brendan McGinty, speaking after the meeting. He said the required cost-savings in the Minister’s budget could be achieved in other ways by, for example, tapering social welfare payments to longer-term unemployed, or making greater efforts to get people off social welfare. “Business is being targeted as an easy hit when the real canards in the system have yet to be examined.”

Ms Burton argued that the change would encourage employers to police illness-related absences better, but Mr McGinty said absenteeism in the private sector was already at a low level and the real problem was in the public sector.

A Government spokesman said the change was a proposal only at this stage and no decision had been made by Government.

Irish Small and Medium Enterprises chief executive Mark Fielding said Ms Burton was “living in cloud cuckoo land”. He said the Minister “has no idea of how businesses are struggling on the ground, during the worst recession in modern times”.

“Many SMEs are already in dire straits due to additional costs being foisted on them through State-controlled increases in transport, energy and local charges. To further add to costs when businesses are struggling to stay afloat, maintain and create employment, is daft. It is as if the Government have a ‘death wish’ for the small business sector,” Mr Fielding said.

Mr Fielding said the business community would fight the proposal “tooth and nail”.

RGDATA, which represents family-owned shops, said the proposal would threaten thousands of jobs while the Irish Hotels Federation described it as anti-business.

Chambers Ireland said the proposal ran contrary to Government rhetoric about supporting business. It would be much better for the Department of Social Protection to concentrate on making work pay and developing better labour force activation strategies rather than hammering employers with a fresh round of additional costs at this time,” said deputy chief executive Seán Murphy.

Early Childhood Ireland, which was formed by the recent merger of Irish Preschool Play Association and the National Children’s Nurseries Association, said yesterday it had been fielding calls from worried creche and preschool managers who are very concerned about Minister for Social Protection Joan Burton’s proposal to transfer responsibility for paying sick pay from her department to individual employers in the first month of illness which they say could put them out of business.

Pushing the burden of paying sick pay to staff onto creche and preschool owners could be a step too far for many of its members, according to Early Childhood Ireland, which says it is polling members and writing to Ms Burton and to Minister for Children and Youth Affairs Frances Fitzgerald to urge caution in this regard.

Irene Gunning, chief executive of Early Childhood Ireland said: “When staff working in a creche or preschool setting are off sick, it’s not like an office environment where things can be managed on a skeleton staff, that sick person has got to be replaced immediately due to the strict regulations applying to teacher pupil ratios in all childcare settings. That means our members would have to pay on the double.”