Information for Employers: Lay-Off and Short-Time due to Covid-19 Pandemic
Under the Redundancy Payments Act 1967-2014, lay-off occurs where an employer is temporarily unable to provide an employee with the work for which they were employed. A short-time situation occurs where an employee’s hours of work or pay are reduced to less than 50% of their normal weekly pay or hours. Where a lay-off/short-time situation arises, an employer must reasonably believe that the situation will not be permanent and must give employees notice to this effect.
In each situation, an employer should notify their employee in writing before the cessation of/reduction of work. This is generally done by way of the statutory Form RP9. It is important to note that where an employer fails to give notice of lay-off or short-time working, they leave themselves open to claims for statutory redundancy payment.
While the legislation does not provide a minimum period of notice, an employer must provide notice which is reasonable in the circumstances. It is likely that exceptional circumstances, such as the Covid-19 pandemic, would permit a short notice period but this has yet to be determined in practice.
At Common Law, an employer must have a contractual right or an implied right through custom and practice to lay-off employees without pay. However, in exceptional circumstances an employer is generally not required to pay employees that have been laid-off. The Covid-19 pandemic is likely to constitute such exceptional circumstances.
The law on employees claiming redundancy from their employer if they have been laid off/ put on short-time work has changed during the Covid-19 emergency period. Normally, where a lay-off or short-time working situation continues for 4 plus consecutive weeks or for a broken series of 6 weeks where all 6 weeks fall within a 13-week period, an employee can trigger their entitlement to statutory redundancy payment.
However, under the Emergency Measures in Public Interest (Covid-19) Bill, an employee will not be able to claim redundancy during the emergency period if they were laid off or put on short-time work as a result of the Covid-19 pandemic. The emergency period set out in the legislation is from the 13th of March 2020 to the 31st of May 2020, but this period may be extended.
Employers should review their contracts of employment in order to clarify whether it is clear that any lay-off period will be unpaid. If it is the case that it is not stipulated in their contract of employment, employers may seek to rely on the unprecedented nature of the Covid-19 pandemic to justify such action as exceptional circumstances. However, such justification has yet to be tested in practice.
It is extremely important that any staff members that are laid-off or on short-time are regularly updated by their employer of the evolving situation during their lay-off period.
Care should also be taken by employers when selecting employees for lay off and short-time to ensure that objective criteria is applied and employers must be mindful of not discriminating, directly or indirectly, against employees on any of the nine grounds prohibited by the Employment Equality Acts 1998-2015.
If you have any queries in relation to this or any other employment issue please contact Niall MacCarthy or Brendan Dillon on 01 2960666 or info@dillon.ie
