‘Lay off, Short-time, Redundancy’
If Covid-19 has seriously disrupted your business you may be faced with reducing working hours or numbers employed.
The options are lay-off or short-time or as a last resort redundancy.
What is lay-off?
When the disruption to your business is expected to be temporary, employees may be ‘laid-off’ until restrictions are lifted or trading conditions improve.
The lay-off is a temporary suspension of the employment contract during which an employee does no work and more importantly receives no payment from the employer.
The employer has no right in law to lay-off employees unless this is provided for in the contract of employment.
What is short-time?
Short-time working is defined under the Redundancy Payments Acts:
- where an employee’s working week decreases to less than half of his/her normal weekly hours or his/her pay is less than half of his/her normal take home pay; and the situation is not considered to be permanent and advance notice is given.
The general pattern of short-time working is ‘three day week’ where employees work on three days and claim social welfare on the other two.
Right to redundancy payments!
Lay-off and short-time are temporary arrangements, so employers should be aware that if either the lay-off or short-time working lasts for a certain length of time, the employee may be entitled to demand a redundancy payment.
If the employee has been laid off or kept on short-time (or a combination of both) for four consecutive weeks or at least six weeks in 13 week period, then the employee can make a claim to be made redundant.
The employer may pay the redundancy lump sum or issue ‘counter notice’ within seven days. By issuing a counter notice the employer promises that within four weeks the employee will be returned to work for a period of at least 13 consecutive weeks.
If this does not happen, the employee is entitled to claim statutory redundancy but is not entitled to a notice payment, as they are deemed to have terminated the employment contract.
HR Contingency Planning
The government has taken a number of very bold steps to sustain economic activity and support businesses and employees.
Employers are responding with a range of flexible and innovative measures to keep their businesses alive – reconfiguring the workplace to maintain social distancing; limiting face to face contact with the public; facilitating working from home.
Many of the measures introduced in response to the crisis will have a lasting impact on how businesses are organised and managed into the future.
Businesses should prepare operating plans which are flexible and sustainable – include closing remote locations and making alternative arrangements to provide for key staff members falling ill:
- Update staffing plans and rostering arrangements
- Identifying ‘at risk’ employees – pregnancy, immunosuppressed people
- Update contact details and communication links outside the office
- Consider holidays, family friendly leave and unpaid leave
Workplace – social distancing
Reconfigure the workplace to reduce close contact in the workplace and limit face to face contact with the public:
- Allow staff to work from home and avoid public transport
- Close remote locations
- Re-organise open plan areas to facilitate social distancing
- Introduce flexible working and staggered break times
To facilitate social distancing and protect ‘at risk’ employees many employers have introduced home working.
Ensure that employees have access to office systems – check network, equipment, communications and security arrangements.
Where working from home is not possible, employees have been facilitated by reduced working hours and time-off to facilitate childcare arrangements.
The government have introduced a number of direct payments and financial supports:
- The COVID 19 Wage Subsidy Scheme administered by the Revenue Commissioners
- The COVID 19 Pandemic Unemployment Benefit is available to employees and self-employed administered by the Department of Employment Affairs and Social Protection
- Business Continuity Voucher (up to €2,500) administered by the Local Enterprise Offices
Home working – will it work for your business?
Covid 19 has forced many businesses to consider the possibility of allowing employees to work from home.
The government announced the temporary closure of all businesses to 5th May 2020 – with the exception of ‘essential services’.
Employers have been advised that where possible employees should be facilitated to work from home. The impact of this temporary measure may cause employers and employees to re-evaluate future working arrangements – will you trust people to manage their working time? Will you need all that office space in future? should you develop a hybrid model / office + home?
How practical it is for the job to be done from home – consider the following questions:
What supports need to be provided to homeworkers?
What equipment & technology is needed – broadband connection access to server, VPN software?
Is your employee data accurate and up to date?
Can duties be carried out with the same efficiency as the usual place of work?
What additional demands will home-working put on employees?
How will you communicate with the home-worker, how will they communicate with co-workers, what days / hours should they be available?
How will output / productivity be measured?
How will you safe guard confidentiality, security and compliance with data protection regulations?
Take steps to establish lines of communication which connect your work force. Many people are used to working in a shared environment and may find remote working a challenge and potentially demotivating – daily team meetings, support call with manager, regular access to colleagues can be helpful counter-measures.
Consider legal implications:
- Changes to the contract of employment
- Definition of working time / break times
- Health and safety issues
Vincent Turley April 2020