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Government Announces Special Payment for Laid-Off Workers made Redundant After Pandemic

The Government has confirmed that the section 12A provision of the Redundancy Payments Act 1967 (as amended), will end on the 30 September 2021, as previously agreed. The Section 12A provision was introduced as an emergency measure in March 2020 and has been extended six times. The purpose of the amendment was to effectively suspend an employee’s right to seek redundancy if they had been laid off or put on short-time work due to the measures required to limit the spread of COVID-19 for the duration of the emergency period.

After the 30th of September 2021 under the Redundancy Payments Act 1967 can claim redundancy if they are on lay off or short time working or a combination of both for at least 4 consecutive weeks, or a period of 6 weeks within the last 13 weeks.

The State will make a special payment of up to a maximum of €1,860, to workers who have lost out on reckonable service while temporarily laid off over the course of the pandemic and who are made redundant.

To support employers, where they are unable to meet their financial obligations in paying statutory redundancy to their employees, the State will fund statutory redundancy payments from the Social Insurance Fund on their behalf.  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.

Reckonable Service – Employees

“Reckonable service” is the service that is taken into account when calculating a redundancy lump sum payment.  It is important to note that reckonable service is a separate and distinct matter from the qualification threshold.  An individual must first meet statutory qualification criteria before becoming eligible to receive a lump sum.  As matters stand, a period of lay-off within the final three years of service before redundancy is not allowable as reckonable for the purposes of the calculation of this payment.   Furthermore, it is the employers’ responsibility to pay statutory redundancy payments in the first instance.

The Department of Enterprise, Trade & Employment has received legal advice to the effect that imposing the cost of the layoff period (if it were to be allowable as reckonable service) on employers would give rise to constitutional issues and is fraught with legal risk.  Such an approach is also in direct conflict with the strategic aim of wider Government policy since the start of the pandemic to minimise financial hardship on businesses with a view to preventing permanent job losses.