As the COVID-19 crisis continues, employers across all sectors are being faced with extremely difficult decisions with regard to their businesses and employees. It is reported that almost one in five of the working population may lose their jobs.
Many employers have no option but to place some, or all, of their employees on temporary lay-off, or short-time, with a view to keeping their businesses afloat. We identify three specific measures the Irish Government should be called on urgently to consider to support businesses in crisis.
Under Irish redundancy legislation, where an employer puts an employee on lay-off or short-time for a period of four consecutive weeks, or for six or more weeks within a period of 13 weeks, the employee can serve notice of their intention to claim a statutory redundancy payment, provided they have 104 weeks service. The employee is then entitled to a statutory redundancy payment unless the employer serves a counter-notice confirming that within four weeks it reasonably expects to be able to provide 13 weeks of employment.
It seems inevitable that the COVID-19 crisis will not pass within four weeks, but one must reasonably hope that it will pass over the coming months. Unfortunately, many employers who lay off staff with the reasonable belief that the cessation of work will be temporary will face a significant number of applications for redundancy payments. Worryingly, the onslaught of these applications will almost certainly test the solvency of many businesses, which are already in serious financial difficulty due to the crisis.
Three suggested measures
First, with a view to supporting businesses, which in turn gives greater protection to workers, the Government should be called on to introduce emergency legislation to extend the four week time-frame referred to above, as part of its emergency response to this crisis.
Second, this proposal to give further breathing space to employers can only reasonably work if the COVID-19 Pandemic Unemployment Payment, currently €203 per week, is significantly increased to give better financial protection to employees who are laid off, and if the current 6 week payment period is extended.
Our third proposed urgent measure to be strongly recommended to Government is to reintroduce the employer statutory redundancy payment rebate. This rebate was at 60% of the statutory payment up to 2012 when it was reduced to 15%. It was then abolished entirely in 2013. A full or partial rebate for statutory redundancy payments paid to employees would be of enormous support to employers in this very difficult time.
This situation is unprecedented in living memory and we are in uncharted territory. The Government needs to continue to work with employer organisations to identify and consider all possible options with a view to supporting employers, and consequently, protecting employment. The three measures recommended would be of great support to many businesses and should be actively considered.
If you would like to discuss the potential impact of the COVID-19 crisis on your business, please contact a member of our Employment & Benefits team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.