On 30 September 2021, the COVID-related emergency suspension of an employee’s entitlement to claim a statutory redundancy payment (the Payment) from their employer following certain periods of lay-off or short time work (the Suspension) under section 12A of the Redundancy Payments Act 1967 (the Redundancy Act) expired.
Redundancy when laid-off/on short time
The Redundancy Act provides that employees who have been laid off for at least 4 weeks (or 6 weeks within a period of 13 weeks) may notify their employer in writing of their intention to claim the Payment (the Notice).
The purpose of this entitlement is to avoid employees being left in limbo where their employer is unable to provide work or where the employee’s weekly working hours or pay is less than half their normal weekly working hours or pay.
Within 7 days of receipt of the Notice, an employer may issue a counter-notice if it reasonably expects that, within 4 weeks of the date of the Notice, the employee will return to their normal working hours for at least 13 weeks. Otherwise, the employee is entitled to the Payment provided they have two years’ continuous service with the employer.
The Payment is calculated at two weeks’ pay (capped at €600/week) for each full year of service plus an additional week’s pay. Part years are also included in the calculation.
The Suspension, first announced in March 2020 as part of the Emergency Measures in the Public Interest (COVID-19) Act 2020 (the Emergency Act), was designed to stave off the potentially large number of pandemic-related Payment claims and give businesses an adequate period to recover. The lifting of the Suspension means that, from 30 September 2021, employees placed on temporary lay-off or short time are once again entitled to claim the Payment from their employer once they meet the criteria outlined above.
The Suspension did not impact other redundancy provisions which remain unchanged including an employer’s right to implement redundancies and to make a Payment in the usual way.
Where a company is dismissing (including on grounds of redundancy) several employees within a period of 30 consecutive days, a collective redundancy situation may be triggered. The thresholds for triggering a collective redundancy vary depending on the size of the company’s workforce:
- 5 employees in an establishment employing 21-49 employees
- 10 employees in an establishment normally employing 50-99 employees
- 10% of employees in an establishment normally employing 100-299 employees, or
- 30 employees in an establishment normally employing 300 or more employees
In a collective redundancy, employers are required to engage in an information and consultation process with the employees’ representatives and provide 30 days’ advance notice to the Minister for Enterprise, Trade and Employment of any dismissal notice on grounds of redundancy. Failure to meet these requirements can result in fines of up to €250,000.
Special payment to laid-off workers made redundant after the pandemic
Employees made redundant after the pandemic are to be given a one-off payment of up to €1,860 to take account of lost reckonable service while in receipt of the Pandemic Unemployment Payment or some other jobseekers’ payment (the Special Payment). This payment will be met by the Social Insurance Fund (the SIF). Where employers are unable to pay their employees’ statutory redundancy, the State may also fund such payments from the SIF on the employers’ behalf.
The government intends the Special Payment to become operational in the first half of 2022.
As the economy gradually reopens, companies need to consider the processes they can put in place to meet any redundancy claims which may arise now that the Suspension has been lifted and assess their future staffing requirements.
For more information, please contact Catherine O’Flynn, or your usual William Fry contact
Contributed by Richard Smith & Jasmine Feehan