The Government has agreed a special payment for employees made redundant who have lost reckonable service while in receipt of the PUP or another jobseekers payment over the pandemic. This payment will come from the Social Insurance Fund (SIF) and will ensure workers won’t be left short of their redundancy entitlements.
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.
This follows concerns that the end of an emergency measure suspending the right of workers laid off by their employers during the Covid-19 pandemic to receive a redundancy payment was to be removed in late September. The development meant tens of thousands of employee lay-offs could have been crystallised, if employers were not in a position to take staff back or had not already. It also meant some employers would face substantial bills for redundancy payments which in many cases they would not be able to meet.
The provision was originally introduced as an emergency measure in March 2020 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. It had been extended six times.
Tánaiste Leo Varadkar said restoring these rights would cost between €30 million and €130 million. While Mr Varadkar said it was “just impossible” to be certain how many redundancies might follow, the costs had been estimated based on 24,000, 40,000 or 56,000 layoffs arising. “We hope it’s going to be at the lower end, my officials say to me they think the lower end estimate is more likely, but for budgetary reasons we have to prepare for the possibility that the number of redundancies crystallising will be greater than we currently project,” he said.
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.
NB – This is a guide for information purposes only and does not constitute legal advice. If you have an issue requiring legal advice, please contact any of the team at Nolan Farrell & Goff LLP, whose numbers can be found on our website www.nfg.ie, or email email@example.com.