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Blog  »  March 2020  »  Putting staff on layoff - Blog
19
Mar 20

Posted by
Laura Murphy

Putting staff on layoff

As the country tries to get to grips with the Covid-19 pandemic and companies are struggling with temporarily closing their business and laying-off staff, here are some key things you need to know about layoff.

Layoff or redundancy?

As a result of the recent business closures, many employees have been layed-off. Layoff is a temporary measure, whereby the individual is still an employee of the company but they are not receiving any remuneration for the duration of the layoff. Normally, once the situation that led to the layoff is over, the employee will return to their previous role on the same terms and conditions, their length of service will not be impacted by the layoff. In the current situation, it is hoped that many business will be able to re-engage their staff once the current emergency situation eases.

Redundancy on the other hand occurs when the employee loses their job permanently, due to a business closure or a reduction in work levels. Where a layoff situation lasts for an extended period of time, an employee may claim statutory redundancy. Currently, where a layoff situation continues for 4 weeks or more, or for 6 weeks in the last 13 weeks, an employee may claim statutory redundancy. Some experts, say this period may be extended given the current situation.

Other Layoff Considerations

  • Employers should give employees notice in writing that they will be put on layoff, although no time period is specified
  • Notice can be given using form RP9
  • Generally, in order to layoff an employee there should be a layoff clause in the contract of employment or it should be custom and practice in the company. It is imagined that flexibility will be shown at this exceptional time, if neither of these exist. However some employers may consider:
    1. including a layoff clause in the agreed terms of employment on a temporary basis,
    2. getting some form of confirmation, signature or email, from the employee to the layoff.

We have drafted a sample letter to notify staff that they are being placed on layoff. This is for guidance only.

The Government have introduced a special Covid-19 Pandemic Unemployment Payment, paid at a flat rate of €203 per week for a 6 week period.

Employers can pay this €203 direct to the laid off employee and claim a refund from Revenue. Click here for further details. 

Posted in Coronavirus