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The Department of Enterprise, Trade and Employment has confirmed that the suspension of an employee's right to trigger redundancy when on lay off or short time will come to an end on 30 September 2021.
It was also announced that further financial measures will be available to support employers and employees through this period. According to Leo Varadkar Minister for Enterprise, Trade and Employment, the "objective here is to ensure that workers aren't left short and employers aren't burdened with heavy costs."
Right to Trigger Redundancy
Normally, if an employee has been on temporary lay-off or short time for 4 weeks (or 6 weeks within a period of 13 weeks) they can give notice to their employer of their intention to claim statutory redundancy. If their employer does not reasonably expect that the employee will be back to work or their normal working hours for at least 13 weeks within a period of 4 weeks from the date of the employee's notice, the employee may be entitled to a statutory redundancy payment.
However, during the pandemic the Government introduced an emergency measure to suspend this right. The purpose of the measure was to reduce the pressure on employers and to reduce the number of permanent job losses and business closures.
Once the restriction is lifted on 30 September 2021, employees on lay off or short time may trigger redundancy and access statutory redundancy payments in the usual way.
Special Payments of up to €1,860 for Employees
Employees with at least 2 years' continuous service (including periods of lay-off) are entitled to a statutory redundancy payment.
Statutory redundancy payments are calculated on the basis of reckonable service. However, periods of lay-off in the 3 years before redundancy are not recognised as reckonable service. This means that employees who were laid-off during the pandemic are at a significant financial loss in a redundancy situation.
By way of compensation, the Government has announced a special payment of up to €1,860 in situations of redundancy. The special payment is available to those employees who have lost out on reckonable service as a consequence of being laid off during the pandemic. It is intended that these payments will become operational in the first half of 2022.
Social Insurance Fund available for employers who are unable to make redundancy payments
For employers who are unable to meet redundancy payments, the Government has confirmed that the State will fund statutory redundancy payments from the Social Insurance Fund. However, employers will be expected to repay these payments to the Social Insurance Fund – although the Government has suggested that a flexible and discretionary approach will be taken in relation to recovering such payments.
Conclusion
From 30 September 2021, employees on lay-off or short time are likely to request redundancy payments from their employers. However, if it is reasonably expected that the employee will return to work or normal working hours within 4 weeks then an employer must give a counter notice within 7 days. Otherwise, the employee will be entitled to a statutory redundancy payment.
As such, it is important that these requests are managed carefully and employers take legal advice where necessary.