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General Overview for Employers and Employees on COVID-19

GENERAL GUIDANCE ON COVID-19

We are living and working in unprecedented times as many of us try and adapt to a temporary new
way of living. An announcement was made by Government on Tuesday 25 th March in respect of new
measures to assist those who have been badly affected by the Covid-19 crisis. We have highlighted
these measures below together with some of the queries we are receiving at the office.

  1. I have been laid off from my job. My employer says they expect it to be temporary, but I am worried.

Many employers now have very little choice but to consider reducing working hours and/or pay as
the future still seems uncertain.

If you have been placed on lay off (according to the Redundancy Payments Act 1967 (as amended), it
means that your employer is temporarily unable to provide you with the type of work for which you
were initially employed. The key to layoff is that your employer believes that the layoff will be
temporary in nature and not permanent. Employers are generally required to give reasonable notice
to their employees in advance of any layoff however, in these uncertain times, many employers,
whilst trying to do their best, are unable to give much notice.

If you have been laid off for a period of time, you may be entitled to a statutory redundancy
payment as outlined below. In addition, you may be entitled to State support which is separate to
statutory redundancy and again we have addressed this below.

  1. My employer has reduced my hours and/or pay by 50%. What does this mean and what
    rights do I have

In essence you may have been placed on “short time” under the Redundancy Payments Acts 1967
(as amended). Short-time occurs where an employee’s hours of work or pay are reduced to less than
50% of normal weekly working hours or normal weekly pay.

Again, employers are generally required to give reasonable notice in advance of any short time
however in these uncertain times many employers, whilst trying to do their best, are being forced to
give very little notice to employees.

Similar to layoff, you may be entitled to statutory redundancy after a period of time as outlined
below. You may also be entitled to additional state support.

  1. Does my employer have to pay me during lay-off?

In general, an employer cannot simply place an employee on layoff or short time without a clause in
the employee’s contract of employment or a collective agreement (an agreement between the
union representatives on behalf of employees and employers) allowing them to do this. However, an
employer could have an implied or unwritten right to do this. An example of this could be where an
employer has had to lay off employees previously without pay e.g. during the recession. This is
known as “custom and practice”. In these unprecedented times, many employers have no choice but
to lay employees off without pay and this could constitute an emergency situation and likely to be
upheld if subsequent claims were taken. We await seeing how these matters will be dealt with in
due course. Specialist advice should be taken in all situations.

  1. When can I claim redundancy?

If an employee has been laid off or on short-time for either (i) 4 or more consecutive weeks, or (ii) 6
or more weeks within a 13-week period of which not more than 3 are consecutive, the employee
may write to their employer setting out their intention to claim a statutory redundancy payment.

Employees should be aware that they must satisfy the general criteria for entitlement to statutory
redundancy first under the Redundancy Payments Act 1967 (as amended) e.g. having at least 2
year’s or 104 week’s continuous service with their employer.

The employee must give this notice in writing to their employer at the latest within 4 weeks after the
lay-off or short-time has ended.

Within 7 days of the employee’s notice, the employer can give counter notice contesting ore
refusing liability to pay a redundancy payment. This applies if it is reasonably to be expected that
within 4 weeks of the employee’s notice the employee will be permitted to work for at least 13
weeks without being laid off or placed on short-time for any week.

On a practical note, it may be very difficult for employers to give any real indication of likelihood of
return to work or that work will be available for 13 weeks given the uncertainties we all face.

The stark reality of the covid-19 crisis is that if an employee claims statutory redundancy after the
layoff period above, many employers may simply not be in a position to pay this and it remains to
see how the Government will deal with these claims. There have been discussions around extending
the layoff period and the possible re-introduction of a rebate or refund for employers who pay the

statutory redundancy however we must await further measures in this regard. However, it is likely
that amendments to the Redundancy Payments Acts 1967 (as amended) will be introduced in due
course to deal with these unprecedented times..

  1. What benefits are available to employees on lay off or short-time?
    Employees who are laid off by their employer due to a reduction in business activity related to
    COVID-19 may apply for Jobseeker’s Payments. The Government also recently announced the Covid-
    19 Pandemic Unemployment Benefit which is a form of jobseekers benefit. This payment will now
    increase from €203 to €350 per week. Details are available on www.gov.ie. and outlined further
    below.
    If you have been placed on short term, you may be entitled to a form of jobseeker’s benefit in
    respect of the days you are no longer working. For example, if your working week has been reduced
    from 5 days to 3 days you may be entitled to receive support for the other two days. Further
    information is available on www.gov.ie.
  2. Are there any additional supports out there for employers and employees?
    On Tuesday March 24 th , the Government announced new measures to provide financial support to
    Irish workers affected by the Covid-19 crisis. Revenue will now operate a Temporary Wage Subsidy
    Scheme. The scheme, enables employees, whose employers are affected by the pandemic, to
    receive significant supports directly from their employer. The scheme will run for 12 weeks from
    Thursday 26 March 2020.
    In summary these changes mean:
  3. Workers who have lost their jobs due to the Covid-19 crisis will receive an enhanced
    emergency Covid-19 Pandemic Unemployment Benefit of €350 per week (an increase from
    €203);
  4. the Covid-19 illness payment will also be increased to €350 per week;
  5. Self-Employed will be eligible for the Covid-19 Pandemic Unemployment Payment of €350
    directly from the Department of Employment Affairs and Social Protection (rather than the
    Revenue scheme);
  6. A temporary wage subsidy scheme has been introduced. This means that the Government
    will pay 70% of an employee’s salary up to a maximum weekly tax free amount of €410 per
    week to help affected companies keep paying their employees. This is the after tax
    equivalent of an employee on €38,000 per year;
  7. Employees who earn between €38,000 and €76,000 per annum will be entitled to a payment
    capped at €350. Those earning above €76,000 will be excluded.
  8. It is the expected the Scheme will last for 12 weeks from 26 th March.
  9. Employers should note that the scheme is not available for everyone. As an employer you
    must be able to show a reduction in income of at least 25% or demonstrate cash flow
    difficulties.

It should also be noted that enhanced protections are being put in place for people facing difficulties
with their mortgages, rent or utility bills. The key is to communicate with banks, utility companies
and other service providers as soon as possible.
Employers should also note that Enterprise Ireland has a number of supports available to help
businesses mitigate or reduce the impact of the covid-19 crisis. Further information is available on
www.enterprise-ireland.com.

The above outlined is for general information purposes only and is not intended to be legal advice.
Specialist legal advice should be sought in all circumstances.

Wendy Doyle Solicitors, 3 Wentworth Place, Wicklow Town

Phone 0404 20688 or 0868509429.

http://wdsolicitors.ie/
https://www.linkedin.com/in/wendydoyle

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