Covid-19 – Redundancy and Lay Off Q&As

by Laura Graham, Partner in the employment law team at Reddy Charlton Solicitors

Can an employee on lay off or short time trigger redundancy?

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Normally yes, but during the current Covid-19 Pandemic emergency period, no.

Under the Redundancy Payments Act, an employee who is on lay off or short time can trigger redundancy if on lay off or short time for:-

• for 4 or more consecutive weeks; or
• for a series of 6 weeks or more within a 12 week period

However, the Emergency Measures in the Public Interest (Covid-19) Act 2020 has temporarily suspended an employee’s right to trigger redundancy during the “emergency period”. The “emergency period” is currently defined as ending on the 31 May 2020, but this period may be extended.

Does this provision affect an employer’s right to trigger redundancy?

No, an employer is entitled to trigger redundancy at any time during the Covid-19 emergency period provided a redundancy situation exists. Prior to making the decision to implement any redundancies, employers should consider whether the collective redundancy provisions apply. Whether or not there is the requirement for a collective redundancy process, the employer should still initiate a consultation process in a redundancy scenario. Failure to do so may leave an employer open to a successful claim for Unfair Dismissal.

How does lay off affect continuity of employment?

Continuity of employment continues as normal during a period of lay off.

This means that an employee, who does not have the requisite service of 104 weeks to qualify for a redundancy payment, may cross that service threshold while on lay off.

As an example, an employee who has 102 weeks’ service is placed on lay off for a period of 4 weeks. That employee is subsequently made redundant.

As the employee now has continuous service of 106 weeks, she is entitled to a redundancy payment as she has more than 104 week’s service.

How does lay off affect reckonable service and the amount of redundancy payment?

Periods of lay off are not allowable as reckonable service, provided that the period of lay off was within a three year period prior to the redundancy.

When calculating service for the purpose of establishing the redundancy payment due to an employee, only reckonable service counts.

Taking the example above, the employee’s reckonable service for the purpose of calculating redundancy would be 102 weeks as the weeks on lay off do not count.

How is a statutory redundancy payment calculated?

A statutory redundancy payment applies to employees who have 104 weeks’ continuous service. Eligible employees are entitled to:

• two weeks’ pay for each year of service; plus
• one additional bonus week’s pay

Statutory redundancy is subject to a ceiling of €600 per week. The payment is calculated by reference to reckonable service on a pro rata basis.

About the author
Laura is a Partner in the employment law team in Reddy Charlton Solicitors. As an employment law specialist, Laura has significant experience in assisting employers and employees on the full range of legal issues that may arise during the employment relationship.
As well as providing advice on day-to-day issues such as employment contracts, managing grievance and disciplinary issues, workplace leave, restrictive covenants and reorganisations, Laura also has strong experience in advising on transfer of undertaking situations, and contentious employment disputes before the Workplace Relations Commission and the Irish Courts.
Working closely with the commercial team, Laura is attuned to the importance of seeking a balance between the commercial needs of business and the management of a business’ most valuable resource, employees.
As the firm’s risk management manager, Laura recognises the importance of having robust policies and procedures in place and has strong experience in drafting policies and procedures, handbooks and contractual documents.
Laura is a member of the Employment Law Association of Ireland and is a Registered Trade Mark Attorney.