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Factsheet for measure IE-2020-11/820 Updated – measures in Ireland

Suspension of the obligation of employers to pay redundancy payments

Country Ireland , applies nationwide
Time period Temporary, 13 March 2020 – 30 September 2021
Context COVID-19
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Rescue procedures in case of insolvency or adaptation of insolvency regulation
Author Roisin Farelly (IRN Publishing) and Eurofound
Measure added 06 May 2020 (updated 25 May 2022)

Background information

In order to provide a temporary relief to the employers facing the economic consequences of the COVID-19 crisis, the Parliament passed a bill suspending the employee's right to ask for a redundancy payment to their employer.

The former legal framework, indeed, allowed employees temporarily laid off, or temporarily put on short-time, for a long time, to consider themselves as dismissed, asking the employer to provide them the associated redundancy payment.

This measure has been introduced through 'The Emergency Measures in the Public Interest (COVID-19) Act 2020', which amended the Redundancy Payments Act 1967.

Content of measure

The measure modified the law about the employees' right to claim redundancy payment from the employer, if temporarily laid off or temporarily put on short-time, solely with reference to the COVID-19 emergency period.

Normally, if a worker is laid off or put on short-time hours, he/she can claim the redundancy payment from his/her employer after 4 weeks or more, or 6 weeks in the last 13 weeks. According to this measure, the worker will not be able to claim redundancy payments during the emergency period, if laid off or put on short-time work as a result of the COVID-19 pandemic. The emergency period set out in legislation is 13 March 2020 to 31 May 2020. This period may be extended. After it ends, the legal framework will go back to the former configuration.

Updates

The following updates to this measure have been made after it came into effect.

19 April 2022

In April 2022, the Government published the Redundancy Payments (Amendment) Act 2022. The Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar, said: "This new law will mean that those that were made redundant to protect public health during the pandemic will not be out of pocket for the period they were laid off. The government is providing a special payment of up to €2,268 tax-free to bridge the gap in their redundancy entitlements."

The new Act ensures that employees who are made redundant, and who were previously placed on lay-off due to COVID-19 restrictions are not disadvantaged in the calculation of their redundancy entitlements. The amount an eligible worker will receive will depend on the length of time they were placed on lay-off.

21 September 2021

The measure suspending the right of workers who are laid off during the pandemic to receive a redundancy payment ended on 30th September.

On 21 September the Government agreed a special payment for employees made redundant who lost reckonable service while in receipt of the PUP during the pandemic. The payment of up to €1,860 will be available from 2022 until 2024 and will come from the Social Insurance Fund (SIF).

The Government also agreed that in cases where employers are unable to fund statutory redundancy to their employees, the State will pay the statutory redundancy from the SIF. “A flexible and discretionary approach will be taken in relation to recovery of the redundancy debt and in many cases the debt can be repaid over a number of years.”

01 June 2021

This was extended until 30 September 2021 under the Economic Recovery Plan.

23 February 2021

Under the Government's revised plan 'COVID-19 Resilience and Recovery 2021 - The Path Ahead', the suspension of redundancy provisions was further extended to 30 June 2021. The Government said this was in order to help avoid further permanent job losses.

13 February 2021

RTE News has reported that the Irish Congress of Trade Unions (ICTU) has raised concerns that prolonged time spent on lay off due will not be counted towards service for redundancy payment calculation. (See Social Partners views).

24 November 2020

The suspension of an employee's right to request redundancy following a period of lay off was further extended until 31 March 2021.

09 November 2020

The suspension of an employee's right to request redundancy following a period of lay off was extended until 30 November 2020.

19 June 2020

The suspension of an employee's right to request redundancy following a period of lay off was extended until 10 August 2020. This may be extended further.

Use of measure

No information yet available.

Target groups

Workers Businesses Citizens
Employees in standard employment
Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role No involvement No involvement
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: Unknown

Involvement

No information about the involvement of trade unions or employer organisations in the drafting or implementation of this measure has been detected.

Views and reactions

The Irish Congress of Trade Unions (ICTU) has raised concerns that prolonged time spent on lay off will not be counted towards service for redundancy payment calculation.

RTE News reported that a letter from the Irish Congress of Trade Unions to the Department of Enterprise Trade and Employment noted that at present, the legislation does not provide for the inclusion of periods of layoff from work as "reckonable for service purposes... In the specific instance of COVID-19 where lay-offs have been imposed on workers with no recourse to Section 12 of the Act whereby they can claim redundancy payments it is clear that a double jeopardy has been created ... I would request that in such circumstances no worker should be penalised in relation to their reckonable service which have arisen in circumstances beyond their control."

As of 21 September 2021: The Irish Congress of Trade Unions welcomed the proposal on reckonable service. ICTU general secretary, Patricia King said: “Congress has consistently advocated to Government that workers, temporarily laid off as a result of the public health restrictions, should not be further financially penalised and that the period spent on PUP should be included in the calculation of any redundancy lump sum payment. Government’s announcement today confirms they have heard and agree with us.

“Without these special provisions, tens of thousands of workers, having been laid off due to the pandemic and their redundancy rights being suspended, would lose out on almost 19-months of redundancy pay, where such payments arise.

Sources

Citation

Eurofound (2020), Suspension of the obligation of employers to pay redundancy payments, measure IE-2020-11/820 (measures in Ireland), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/IE-2020-11_820.html

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