Cabinet extends suspension of right of laid-off workers to seek redundancy

The Government is to extend until next March a current suspension of the rights of workers who have been laid off temporarily to seek redundancy from their employer.

Ministers believed that without such a measure a large number of redundancy claims would have “crystalised” under provisions of existing legislation, potentially causing hundreds of businesses to fail.

The Cabinet also agreed on Tuesday that the Covid-19 Credit Guarantee Scheme (CGS) will now stay open for new applications until June 30th, 2021.

The Government also agreed to fund outstanding applications to the now closed Restart Grant Plus Scheme.

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Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar said he recognised the Government's decision to further suspend redundancy provisions would be "really disappointing" for some staff who wanted to take redundancy before the end of the year.

“This was a really difficult decision for the Government to make, and not one which was taken lightly. It was taken in the best interests of society as whole in order to avoid the triggering of further business failures and job losses.

“We know that the first quarter of 2021 will be particularly challenging for many businesses, which, apart from dealing with considerable trading difficulties due to Covid-19, will also be facing the added disruption and uncertainty of Brexit.

“We want to help businesses to survive this period so that we can protect as many jobs as possible and get people back to work as soon as it is safe to do so.”

Job losses

The Department of Enterprise, Trade and Employment said the suspension of the redundancy provisions had been extended until March 31st “to help avoid further permanent job losses at a time when some 350,000 people are in receipt of the Pandemic Unemployment Payment and 41,200 employers have registered for the Employment Wage Subsidy Scheme”.

Mr Varadkar said the €2 billion Covid-19 Credit Guarantee Scheme was the biggest State-backed loan guarantee in our history. It formed part of a larger package of grants, wage subsidies, tax reductions and other low-cost loans which had been introduced to help businesses during this exceptionally difficult time.

“We are now seeing an average of 180 businesses drawing down loans each week, starting from what was a fairly low take-up. The extension of the scheme will give business a level of certainty that if they need liquidity the Government is here to help.

“We will also see some new non-bank lenders, including many Credit Unions, coming onboard in the coming weeks which should increase the accessibility and visibility of the scheme.”

The Department of Enterprise, Trade and Employment said the Government had also also agreed to fund outstanding applications to the closed Restart Grant Plus Scheme, which had now been replaced by the Covid Restrictions Support Scheme (CRSS).

“The Government has approved a total of €685 million for over 117,000 applications, at an average payment of €5,800, since the scheme was launched in May. Approximately 11,000 applications are outstanding to the scheme, and the Government has allocated a further €33million to meet this cost.”

Four weeks

Under the Redundancy Payments Act 1967, employees who have been laid off for at least four weeks have the right in certain circumstances to demand that their employer make them redundant.

The aim of the 1967 legislation was to ensure workers would not be left in an indefinite “limbo” –- where they were neither at work, fully unemployed or available to take up a job elsewhere.

The department said the right to claim redundancy had not been permanently removed. It said employees who remained on lay-off or on short-time work for the requisite period when the current emergency measures expired, would be entitled to exercise their right to claim redundancy from their employer.

It said all other redundancy provisions remain unchanged.