QUESTIONS ANSWERED IN THIS SECTION:

• What options are available to me before I consider layoff or short time?
• I am putting my employees on temporary layoff or short time. What procedure should I follow?
• Can an employee claim redundancy while on temporary layoff?
• Can an employee claim redundancy while on temporary layoff?
• Can I implement a company wide pay cut?
• My employment contract does not allow for temporary layoff, but I need to put this measure in place. What can I do?

 

What options are available to me before I consider layoff or short time?

Employers may be eligible to apply for income support up to 85% of an employee’s take home income up to a maximum weekly tax free payment of €410 (that is, 70% of take home weekly income of €38,000 per annuum).

The employer is expected to make best efforts to maintain as close to 100% of normal income as possible for the subsidised period.

Revenue have provided further guidance on operation of the scheme.

I am putting my employees on temporary lay off or short time. What procedure should I follow?

The first thing to do in this instance is to check your employment contract to ensure there is a clause that allows for these measures to be put in place. Once you have confirmed that this clause is in place the following steps should be followed:

• Issue notice to employees. This can be done using the RP9 form. Employers should fill in part A of this form.
• Give adequate notice. The current legislation governing temporary layoffs and short time states that employers must be given “reasonable notice” if a business is implementing these measures. As soon as you are aware that you will need to put these measures in place it is important to notify your employees of this.
• Employees on temporary layoff or short time will be eligible for state aid. Those on layoff can apply for the emergency Covid-19 payment.
• This can be paid by the employer or claimed from social welfare. Details on how employers can pay this can be found here.
• Employees on short time will be eligible for short time support, which can be claimed from social welfare. There is now an online system for claiming these payments, available at mywelfare.ie in order to reduce footfall in INTRO offices.

Can an employee claim redundancy while on temporary layoff?

Ordinarily if an employee is on temporary layoff for more than 4 consecutive weeks, or 6 weeks in a 13-week period, they can claim it is a redundancy situation. Emergency legislation passed to deal with the current Covid-19 outbreak has suspended this entitlement until 10^th August 2020.

Can I implement a company wide pay cut?

A pay cut is considered to be a change to terms and conditions of a contract, even if it is a temporary measure. Therefore, it is vital that the company does not make a unilateral decision to implement this measure.

A pay cut can only be put in place by mutual agreement, so through a consultation process with each employee. If employees are agreeable to such measures it is important to set out the terms and conditions in writing, and to keep evidence of the employees’ agreement (ideally through a signature confirming agreement) to the temporary change on file.

 

My employment contract does not allow for temporary layoff, but I need to put this measure in place. What can I do?

If your employment contracts do not have a clause allowing for temporary layoffs, then you must approach the situation as you would any change to terms and conditions of a contract, even if it is a temporary measure.

Consultation must be undertaken and mutual agreement reached before layoffs are put in place. If employees are agreeable to such measures it is important to set out the terms and conditions in writing, and to keep evidence of the employees’ agreement (ideally through a signature confirming agreement) to the temporary change on file.