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The airline, tourism, hospitality and some retail sectors have been hard hit by the Covid-19 outbreak and as the situation unfolds, the only thing that’s certain is ongoing uncertainty.
Companies have announced job losses, while the government called for pubs to close until March 29th at least, many more restaurants and cafes have closed to aid social distancing measures or because of lack of customers.
With parts of Europe shutting their borders and Italy and Spain implementing severe restrictions to people leaving their homes, the economic damage due to the outbreak looks set to continue.
Lay off and Short-time
Employers may have heard these words being used in the media but what do they mean for your business?
Lay off is where an employer is temporarily unable to provide work for the employee.
Short-time is where an employee’s earnings for any week are less than half their normal weekly earnings or the hours worked by them in any week are less than half their normal weekly working hours, due to a sharp reduction in the amount of hours/work required.
In both cases these must be temporary situations and the employer must notify the employee before they come into effect.
To avail of lay off or short time it must be in the employee’s contract or be a custom and practice of the workplace. Otherwise it should be done on agreement with the employee.
An employee should be given notice, though no time-frame is specified in the legislation and in light of the virus outbreak, current circumstances will very likely be taken into account in any dispute. Employers should ensure that in making any decisions regarding lay off or short time that it is done fairly, transparently and not in a way that could give rise to a claim of discrimination.
Should the employee be deemed to have been on lay off or short-time and this has been the case for 4 weeks or more, or for 6 of the last 13 weeks, the employee who has been placed on either lay off or short-time can give their employer notice in writing, of their intention to claim redundancy.
The Employer can serve a counter notice denying the redundancy if they can give the employee 13 weeks work without lay off or short time. The work must be available within 4 weeks of the employer’s notice.
There is specific paperwork and time-frames involved in lay off and short time and we recommend that you obtain advice if you are considering that route.
Redundancy
Certain criteria must be met before employees are entitled to a redundancy payment. Among these are that they must have at least 104 weeks service They must be over 16 years of age and their redundancy must come about as a result of a genuine redundancy situation. The role is redundant and not the person.
The Protection of Employment Acts, 1977 to 2007 must be followed when an employer employing more than 20 people proposes to make at least five redundant in any period of 30 consecutive days.
In cases of collective redundancies, the Employer is obliged under the legislation to inform and consult employees or their representatives. These consultations must take place at the earliest opportunity and at least 30 days before notice of redundancy is given. The aim of the consultations is to see if there are any alternatives to redundancies
Redundancy entitlement
If the employee is made redundant within one year of being put on short-time, their redundancy payment may be based on their earnings for a full week. If, however, they are made redundant after working reduced hours for more than one year, how a redundancy payment will be calculated depends on whether or not they accepted being put on reduced hours.
If the employee fully accepted the reduced working hours as their normal week and never asked to return to full-time work, then their redundancy payment will be based on their gross pay for the reduced working hours.
The present amount of Statutory Redundancy pay is two weeks’ pay for every year of service plus one additional week subject to a maximum €600 per week.
Where an employer genuinely cannot afford to pay an employee their entitlement, the employer and employee can apply to the Social Insurance Fund for a Redundancy Lump Sum using form RP50. Proof of inability to pay must be submitted with the RP50. The following proof of inability to pay is required:
A letter from an accountant/solicitor confirming the employer’s inability to make payment. Documentary evidence such as audited accounts should also be submitted.
An acknowledgement of the employer’s liability of 100% of the statutory redundancy payment owed to the Social Insurance fund.
Alternatives
Some other avenues employers may consider include;
Remote working
Working up annual leave / paid time off to be taken at a future date
Annual leave
Parental leave
Parents’ leave
Compassionate leave.
The Department of Employment Affairs and Protection have an online guide for employers and employees specifically relating to Covid 19 and its implications.
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