‘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.