When to implement lay-offs, short-time and redundancy safely in Ireland
Lay-Off and Short-Time
Lay-Off and Short-Time are phrases that have been used far too often over the last 18 months. But how much do we really know about them and when is it safe to put them in place. Employers and employees have been put to the test undoubtedly. However, it is very important they these policies are implemented correctly and with the right documentation to back it up. Section 11 of the Redundancy Payments Acts 1967 – 2004 sets out what both of them mean for employers.
An employer may invoke the layoff policy where the need for working hours has temporarily ceased but does not constitute termination of employment. These are important components and would have been used in situations where businesses had no other choice to close during level 5 Covid restrictions. If you don’t already have a lay-off policy within the employee handbook, there is still an obligation to pay your employees during the time off unless otherwise agreed. However, it has been deemed acceptable that if you can show through custom and practice that lay-off periods have not been paid in your industry then you would not pay going forward.
Slightly different from lay off, short-time is where there is a diminution or in other words a reduction in work. It means that an employee will be paid less than one-half of their normal weekly remuneration or the employee will be working less than one-half of their normal weekly hours. Most employers will opt to decrease the hours for employees. An employer must reasonably believe that this will be a temporary reduction, which must be stipulated in the policy.
For both short-time and lay-off, the employer must provide advance notice to the employee.
Reduced working hours normally get mistaken with Short-Time. However, if you can provide more than half of an employee’s normal weekly hours but not the full amount prior consent must be given to avoid a breach of contract.
The Emergency Measures in the Public Interest (Covid-19) Act, 2020
This legislation was introduced to help manage the crisis that was COVID-19. In normal circumstances, if a lay-off or short-time situation continues for 4+ consecutive weeks (or for six weeks in the last 13 weeks of which not more than three are consecutive), an employee would be entitled to claim redundancy pay under the Redundancy Payments Act 1967 to 2014. The employee in this instance would be entitled to statutory redundancy payment but they would loose their entitlement to notice pay. This is due to be in effect until 30 September 2021.
In the unfortunate situation that the above options do not work to keep your business afloat, the last step you may need to invoke is Redundancy. Genuine grounds for Redundancy are one of the reasons for a fair dismissal provided it follows the grounds under the Redundancy Payment Act:
(a) Where an employer has/intends to cease carrying on the business, or at the location i.e. closure of business or moving it to another location.
(b) Where the requirements for an employee to carry out work of a particular kind in the place where he/she was employed has/is expected to cease or diminish i.e. no longer a requirement for that role/the work to be carried out.
(c) Where the employer has decided to carry on the business with fewer or no employees i.e. a reorganisation with fewer staff or outsourcing.
(d) Where an employer has decided that the work for which the employee has been employed should from now on be done in a different manner for which the employee is not sufficiently qualified or trained i.e. a reorganisation with employee not sufficiently trained and training would cost too much.
(e) Where an employer has decided that the work for which the employee has been employed should from now on be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained i.e. job enlargement so that employee would have to do current job plus more and is not sufficiently trained and training would cost too much.
Tackling this piece of legislation is difficult and there are several considerations to take before applying due process.
Corporate HR Ireland can support you on these matters so please do not hesitate on getting in touch.
This blog was brought to you by Sarah Quirke, HR Executive with Corporate HR Ireland. Sarah can be reached by Email: email@example.com
Sign up to our newsletter if you’d like to hear more from us.