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With the spread of coronavirus, or COVID-19, showing no signs of abating, there are some points employers should be keeping in mind.

Employer obligations

In our previous article, we set out an employer’s obligations towards employees. This recommendation to be conscious of an employer’s duty of care and to be flexible remains. However, times have moved on and on Thursday, 12 March 2020 Taoiseach Leo Varadkar urged employers to facilitate employees working remotely where possible. On Tuesday, 24 March 2020 he went a step further and shut many workplaces. On Friday 27 March 2020, the Taoiseach announced further constrictions, asking citizens to stay at home until 12 April 2020 and only to leave in limited circumstances. These include travel to and from “essential work” which cannot be done from home, shopping for essentials and for brief exercise within a 2km radius of their homes.

The list of essential workers published on Saturday, 28 March 2020 is as follows:

  • Agriculture and fishing
  • Manufacturing
  • Repair and installation of machinery and equipment
  • Electricity, gas and water
  • Construction
  • Wholesale and retail trade
  • Transport storage and communication
  • Accommodation and food services
  • Information and communications
  • Financial and legal activities
  • Professional, scientific and technical activities
  • Rental and leasing activities
  • Administrative and support services
  • Public administration and defence
  • Human health and social work activities
  • Community/voluntary services

Employers are advised to identify those employees, including sub-contractors and so on, who are essential to the provision of their service and to notify employees accordingly. Employers are also required to provide employees with a letter for the employee to carry when travelling to and from work, along with one other form of identification, indicating that the person is an essential employee and, as such, required on site.

Options for employers affected by COVID-19

Many employers have already been faced with some difficult decisions regarding the continued employment of their employees. The reality is that for many hundreds of thousands of employees, the work they are employed to do simply no longer exists. That being the case, the options available to employers, in our view, include:

  • Dismissal / Redundancy: Where work ceases to exist and an employer considers that cessation to be permanent, the employee’s role is likely to be redundant. Redundancy brings with it an obligation to give an employee notice of termination plus, if eligible, a statutory redundancy payment.

  • Lay-off: Where an employer is not in a position to provide work for which an employee is employed to do and reasonably believes that the lack of work is not permanent, the resulting cessation of work is a “lay-off”. The redundancy payments legislation provides that after a certain period of “lay-off” an employee may have certain rights to seek a redundancy payment. This right to seek a redundancy payment where the lay-off is as a result of the COVID-19 pandemic has now been removed for the duration of the “emergency period”, 13 March to 31 May 2020.

  • Reduction in hours: Where an employer reduces an employee’s hours or remuneration by at least a half because of a diminution in work and reasonably believes that the diminution in work is not permanent, the reduction in hours/pay is called “short-time”. Again, the redundancy payments legislation provides that after a certain period of “short-time” an employee may have certain rights to seek a redundancy payment. And again, this right to seek a redundancy payment where the short-time is as a result of the COVID-19 pandemic has been removed for the duration of the “emergency period”.

  • Reduction in pay: During the financial crisis and again now, many employers are choosing to reduce employees’ pay in order to remain viable.

Paying employees during the lockdown

The general legal position is that an employee is entitled to continue to be paid during lay-off unless the employment contract provides for lay-off. However there is a reasonable basis to argue that an employer may be permitted to lay off employees without pay in exceptional circumstances, such as the COVID-19 crisis. As we have seen over the past month, a Government enforced partial or full closure of a business due to COVID-19 has become commonplace and it is our view that these constitute exceptional circumstances to justify lay-off without pay.

We provide an overview of the legal position for the payment of employees during this crisis. The table will be subject to the specific employee’s terms and conditions of employment.


  • € - entitled to be paid
  • X – no entitlement to be paid
  • S – entitlement to Illness Benefit (€350 / week)


Can Work From Home

Can’t Work From Home

Government Forced Shut Down (currently in place until 12 April unless deemed “essential service”)


Medically Certified Absence



Employment specific supports during the emergency

  • Sick pay: Employees will be entitled to €350 Illness Benefit from the State per week for up to two weeks if they are medically required to self-isolate, or for the duration of their medically-certified absence from work with a COVID-19 diagnosis, up to a maximum of 10 weeks. Employees will be entitled to Illness Benefit from the start of their absence and the normal “6 day waiting period” does not apply where the illness is COVID-19 related. For sick leave that is not directly related to COVID-19, the normal Illness Benefit rules apply. The Employee may also be entitled to contractual sick pay.

  • COVID-19 Pandemic Unemployment Payment: Employees or the self-employed who have “lost employment” as a result of the COVID-19 crisis are entitled to apply for the Pandemic Unemployment Payment (PUP) of €350 per week. This payment will be paid for the duration of the pandemic emergency. “Lost employment” includes being temporarily laid off from work or asked to stay home due to the pandemic. It is only available to employees who are not being paid by their employer.

  • Temporary Wage Subsidy Scheme: On Tuesday 24 March 2020, the Government published details of its Temporary Wage Subsidy Scheme (TWSS). The scheme is expected to last 12 weeks from 26 March 2020. In very simple terms, TWSS provides for a rebate to employers of up to 70% of an employee’s take home income subject to certain weekly caps.



Transitional Period (phase 1 of TWSS - until latest 20 April 2020)


Subsidy of the maximum of €410 in respect of eligible employees for employers who operate the scheme regardless of the amount paid to the employee with a balancing refund to Revenue, if necessary, to be made in due course.

Standard Amount (phase 2 of TWSS – after 20 April 2020 at latest)

€350 for duration of crisis

Part time employees get the flat rate also, even if the PUP is more than normal wage.

Eligible employers are entitled to a weekly refund of what they pay the employee, up to 70% of the employee’s normal salary, capped at

  • €410 for salaries up to €38,000
  • €350 for salaries between €38,000 and €76,000 (same as PUP)

There is no refund for payments to employees whose salaries are over €76,000.

Payment for up to 12 weeks, but could be extended.

Who applies




Total Lay off

  • Staff on payroll
  • Staff temporarily not working
  • Staff on reduced hours; and/or
  • Staff on reduced pay

Top Up

No – Total cessation of pay by the employer

“Best efforts” to maintain a significant proportion, or 100% of income over the period of the scheme.

Qualifying for the TWSS

In order to qualify for the TWSS an employer must be able to show at least a 25% per cent reduction either in the turnover of the employer’s business or in customer orders being received by the employer.

One of the other conditions, which is causing some alarm and confusion for employers, provides an employer must also be able to show that it is “…unable to pay to a specified employee the emoluments the employer would otherwise have normally paid to him or her…”. In Guidance published since the legislation was enacted, the Office of the Revenue Commissioners has said:

“The declaration by the employer is not a declaration of insolvency. The declaration is simply a declaration which states that, based on reasonable projections, there will be, as a result of disruption to the business caused or to be caused by the Covid-19 pandemic, a decline of at least 25% in the future turnover of, or customer orders for, the business for the duration of the pandemic and that as a result the employer cannot pay normal wages and outgoings fully but nonetheless wants to retain its employees on the payroll.”

While the conditions to avail of the TWSS under the legislation appear to be quite restrictive, the guidance on how it will be operated by Revenue appears to be more pragmatic. In response to criticism and confusion over eligibility for the scheme, Niall Cody, Chairman of the Revenue Commissioners, reaffirmed a more pragmatic approach being taken by Revenue in applying the conditions where he said employers who have “normal cash reserves to meet future expansions and future plans” can still qualify for the scheme. Minister for Finance and Public Expenditure and Reform, Paschal Donohoe, also recently reaffirmed this. While these confirmations are welcomed by employers, the guidance from Revenue on this issue provides that where an employer does have strong cash reserves, “the Government would expect the employer to continue to pay a significant proportion of the employees’ wages”.


There is still a considerable amount of confusion and concern about what exactly is meant by the inability to pay normal wages and if an employer makes the wrong call, the legislation provides for criminal liability, interest and penalties. Mr Cody, and the Minister, have highlighted the purpose of the scheme is to support employers, to pay employee wages, but also to leave companies in a position when the recovery comes to still be a valid viable business. Employers, in our view, will need to exercise caution in determining whether to apply to the TWSS scheme.

The names of employers who avail of the TWSS will be published.

If you would like to discuss the potential impact of this issue 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.

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