On 24 March 2020 the Government published the draft text of the Emergency Measures in the Public Interest (COVID-19) Act 2020 (the Bill) which was expedited through the legislative process last week.
The Act includes a wage subsidy scheme which we investigated in our article The New Wage Subsidy Scheme – Is It Fit For Purpose? together with amendments to the COVID-19 Pandemic Unemployment Payment, amongst other measures.
Lay-off, short-time and redundancy
In our recent article Lay-Off and Short-Time Working in Response to Covid-19 – What Employers Need to Consider we considered an employer’s ability to change employees working arrangements in certain circumstances. Briefly, under the Redundancy Payments Acts 1967 to 2014 (the Acts), where an employer reasonably believes there is a temporary cessation or reduction in work carried out by its employees, those employees can be notified of a lay-off or short-time working arrangement.
The Acts entitle an employee to provide their employer with an intention to claim redundancy if a lay-off or a short-time situation continues for four plus consecutive weeks (or for six weeks in the last 13 weeks of which not more than three are consecutive). An employer can only push-back on such a request where it reasonably expects the employee will be back to normal working hours within four weeks. Such a timeframe may not be feasible in light of the current Covid-19 pandemic. Notwithstanding measures such as the recently announced temporary wage subsidy scheme and the Covid-19 Pandemic Unemployment Benefit, some employees may wish to pursue redundancy (and a tax-free statutory redundancy lump sum payment).
Amid the pressing concerns of helping both businesses and employees through the difficult and uncertain Covid-19 pandemic, the Act amends this employee entitlement to seek redundancy in the above circumstances. Section 27 of the Act, if enacted as currently drafted, will temporarily prevent an employee from seeking to be made redundant potentially triggering an entitlement to a statutory redundancy lump sum payment during the “emergency period” (defined as the period between 13 March – 31 May 2020). The Act provides scope for an extension of this emergency period, if necessary, to cover the duration of the pandemic.
This measure will be welcomed by employers who may otherwise have been obliged to pay out multiple statutory redundancy lump sum payments during these uncertain times. The temporary pause to an employee’s ability to seek redundancy in a lay-off or short-time situation aligns with the State’s prerogative to keep employees employed and on the payroll to “keep the lights on” in order to hit the ground running when the pandemic is overcome. In this model, an employer will not need to go through a potentially lengthy process of recruitment and training to get their business back up and running but will have their existing workforce ready to get back to “normal” working arrangements as soon as possible.
We will continue to keep you abreast of all developments via our dedicated COVID-19 Hub.
Contributed by Darran Brennan
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