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

The Government is to extend until November 30th a current suspension of the rights of workers who have been laid off temporarily to seek redundancy from their employer.

Minister for Social Protection Heather Humphreys acknowledged that while the decision would be met "with competing views", it was necessary to protect businesses and prevent permanent job losses.

The Cabinet also decided on Tuesday that the pandemic unemployment scheme is to be kept open for new entrants until the end of the year.

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.

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Covid-19 emergency legislation introduced earlier this year contained a provision which suspended the right of laid-off employees to demand redundancy. This provision was supposed to come to an end on September 17th.

“Today’s decision to extend these provisions was a difficult one. But in making this decision, we had to consider the need to ensure businesses survive and that permanent job losses are avoided as much as possible,” Ms Humphreys said.

“I know many employees who have been laid off are experiencing great uncertainty. It’s important to note that the right to claim redundancy has not been permanently removed. Employees who remain on lay-off or short-time work for the requisite period when this emergency measure expires will be entitled to exercise their right to claim redundancy from their employer.”

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.

If an employer cannot guarantee 13 weeks of full- time work within four weeks, then the employee automatically becomes entitled to redundancy.

At the time of the suspension of the provisions of the 1967 legislation, there were fears that the Covid-19 crisis could lead to large number of workers who had been laid off by their employer invoking their rights to be deemed to be redundant.

There were fears this could have had major impacts on the cash flow of business which would have had to pay redundancy lump sums or, alternatively on the State which could have to finance statutory redundancy terms where companies could not afford to do so.

Ms Humphreys said she believed extending the end date “will help prevent redundancies at a time when the labour force as a whole is facing a significant challenge with some 210,000 people in receipt of Pandemic Unemployment Payment and a further 32,200 employers have registered with Revenue for the Employment Wage Subsidy Scheme in respect of their employees”.

She added: “Additional redundancies would expose businesses to further debt at a time when they are facing considerable trading difficulties and have a serious impact on the potential for a business to recover.

“The further extension until 30th November is necessary to continue to mitigate against the risk of insolvency and bankruptcy situations and further job losses, and will contribute to the viability of business.”

At the height of the Covid-19 crisis at the end of April/early May there were just under 600,000 people receiving the special pandemic unemployment payment.

The Department of Employment Affairs and Social Protection said on Monday that there were 209,941 receiving the pandemic unemployment payments this week – a fall of more than 64 per cent from the peak figures recorded at the end of April and early May.