- 18 March 2020
- Posted by: Laura Graham
- Categories: Employment and Regulatory, Employment Law
Covid-19 -Introduction of Coronavirus Pandemic Unemployment Payment
This note is part of a series that the lawyers of Reddy Charlton will issue on the major legal, personal and business issues that will confront us all during the Covid-19 crisis.
On 16 March 2020, the Government has introduced a Coronavirus Pandemic Unemployment Payment to assist employees and self-employed individuals who have lost their employment as a result of reduced economic activity caused by the COVID-19, otherwise known as the Coronavirus.
In what situation can individuals get this payment?
This payment is available to employees and self employed individuals. It will apply to those who have lost their employment or had their working hours reduced as a result of reduced economic activity stemming from the Coronavirus. There is no restriction on those aged between 18 and 66 applying for the payment so long as the individual has been employed until now but their employment has now ceased.
What does lay-off and short-time working mean?
In circumstances like this, where it is unclear as to how matters are going to progress, an employer may close or reduce the hours of business. Where this is the case, businesses may opt to either lay-off employees or put them on short-time working.
A period of lay-off may occur when a business has to close down for a period or where a business is seeking to avoid redundancies. It might be the case that all employees are laid off or a portion of staff are laid off. During a period of lay-off an employee will not be required to come into work, however they may not receive their salary either. If the employee contract or staff handbook does not specifically provide for laying employees off without payment, then there is no right to lay staff off without pay – unless the employer can establish that it is custom and practice to do so.
Therefore if an employer was to lay off a member of staff where there was no contractual right to do so the employee could bring a claim for back pay to the Workplace Relations Commission under the Payment of Wages Act 1991. Practically speaking however, employees at this time may agree to the lay off rather than redundancy, in the hope that this situation is temporary.
On the other hand a period of short-time working is where an employee will work less than 50% of the contracted weekly hours or will receive less than 50% of the weekly pay. The employee may only receive a pro-rated amount of their salary depending on their hours worked, rather than their normal full-time salary. Again, as with lay-off, it will depend on whether there is a contractual right or custom and practice to do not pay employees during a period of short-time working. Otherwise an employee could make a claim for unpaid wages under the Payment of Wages Act 1991.
How should we carry out a process to put employees on lay-off or short-time working?
Ideally, there should be consultation with employees, and the reason for the lay-off or short-time working should be explained – even in the current situation where the rationale of Coronavirus might seem fairly obvious to everyone. It is also important to keep employees informed during this time. These must be considered to be temporary situations and employers must notify employees before they commence. There is no minimum notice period required before an employee is put on to lay-off or short-time working however it is recommended that as much notice as is reasonably practicable be given. In the current circumstances it is likely that what would be considered reasonable notice would be fairly short.
Employers should use an RP9 form to inform employees that short-time working or a lay-off is commencing. Generally speaking, a failure to notify an employee could result in a claim for statutory redundancy from the employer.
Employers should be mindful of any contractual provisions which they have in relation to lay-offs or short-time working, or if there has been a custom and practice in relation to lay-off or short-time working in the past. In the absence of contractual provisions allowing for either, then agreement should be sought from employees. However it might be a case where the employee does not agree then the employer may be required to implement redundancies instead.
Where it is the case that not everyone in a business requires to be laid off or put on short-time working, the selection process for choosing which employees to put on lay-off or short-time working should be the same as would be applied to a redundancy process. This means that the criteria applied should be both fair and reasonable. Further, the criteria must not discriminate on the basis of any of the 9 grounds outlined in the Employment Equality Acts, i.e., age, civil status, disability, family status, gender, membership of the Traveller community, race, religious belief or sexual orientation.
If an employee is doing short-time working, are they entitled to any Government benefit?
Where an employer puts an employee on short-time working and reduces an employee’s hours to 3 days or less per week from regular full-time hours, the employee is able to apply for a ‘Short Time Work Support’ which is a form of Jobseeker’s Benefit. This payment is available generally and is not specifically tied to coronavirus.
How can an individual get the Coronavirus Pandemic Unemployment Payment and how much is it? How long will the payment last for?
An application form can be downloaded from the Government website below:-
The payment is currently a flat payment of €203 per week. The payment will last for a period of up to 6 weeks. Individuals may also be able to apply for other relevant jobseeker’s payments to supplement the Coronavirus Pandemic Unemployment Payment.
For further information on this topic, please contact Laura Graham at lgraham@reddycharlton.ie
