Lay-off, short-time working and redundancy

Introduction

Many businesses have been forced to lay off staff or reduce their working hours temporarily during the coronavirus (COVID-19) pandemic.

This document outlines the difference between lay off and short term working, gives information on social welfare supports and tells you when a redundancy payment can arise.

If your job has been affected by COVID-19, you can get more information in our document on Employment rights during the COVID-19 restrictions.

What is a lay off?

A lay-off situation arises if your employer:
  • Is unable to provide work for you
  • Believes this is a temporary situation and
  • Gives you notification of the lay off before the work finishes

During lay off you remain an employee even if you are not being paid.

What are short-time working arrangements?

Short-time working refers to a very specific situation where:

  • Your weekly pay is less than half your normal weekly pay or
  • The hours you work are reduced to less than half of your normal weekly working hours
  • Your employer has a reasonable belief that the situation will be temporary and notifies you of the reduction in hours and/or pay

Rules for short-term working and lay-off

Your employer should follow certain rules if they bring in temporary lay-offs or short-term working arrangements.

In your contract or with your agreement

Your employer can lay you off or put you on short time if it is in your contract of employment or if it is custom and practice in your workplace. Otherwise your employer should not lay you off or put you on short time without your agreement. However, if you do not agree you may be made redundant.

You can read more about your options if you do not agree to the lay off or short-time working in our document on being asked to reduce your pay or hours of work.

Give you notice and keep you informed

Your employer should explain the reason for the lay off or short-time working to you and keep you informed of the situation during the period of lay off or short-time working.

In both cases, these must be temporary situations and your employer must give you notification of this before they start. During the current coronavirus pandemic, you may have been given very short notice.

How does an employer select employees for temporary lay-offs or short-term working arrangements?

When selecting employees for lay off or short-time working, employers should apply the same criteria for selection as for redundancy. The criteria should be reasonable and applied fairly.

For example, the custom and practice in the workplace may be last in, first out, or the contract of employment may set out criteria for selection.

Under employment equality legislation, the selection must not discriminate against employees on any of the following 9 grounds:

  • Gender
  • Civil status
  • Family status
  • Age
  • Disability
  • Religious belief
  • Race
  • Sexual orientation or
  • Membership of the Traveller community

Your employment rights during lay off or short-time

During lay off or short-time working, you still are employed by your employer and your contract of employment remains in force. This means that you are entitled to benefit for any public holidays that occur during the first 13 weeks of lay off. Part-time employee must have worked at least 40 hours in the 5 weeks before the public holiday. You can get more information in our document on public holidays. You do not accrue annual leave during lay off but you are entitled to take annual leave that you accrued before being laid off.

Lay off and reckonable service

To qualify for statutory redundancy, you must have 104 weeks of reckonable service with your employer. A period of lay off is not reckonable service. This means that if you are laid off and have less than 104 weeks of reckonable service, you will not qualify for statutory redundancy. It also means that the time you spend on lay off is not used to calculate your redundancy lump sum.

If you were laid off because of COVID-19 and are getting the COVID-19 Pandemic Unemployment Payment (PUP), a jobseeker’s payment, or another social welfare payment, this is counted as a period of lay off. This means that this period of time is not counted towards your reckonable service.

But if your employer got payments through the Temporary Wage Subsidy Scheme (TWSS) or the Employment Wage Subsidy Scheme (EWSS) and continued to pay you during this time, then this period of time is counted towards your reckonable service.

Changes to redundancy rules during COVID-19 emergency period

The law on claiming redundancy from your employer if you have been temporarily laid off, or temporarily put on short-time work will change during the COVID-19 emergency period.

Normally, if you are laid off or put on short-time hours, you can claim redundancy from your employer after 4 weeks or more, or 6 weeks in the last 13 weeks.

If you were put on lay off or short-time hours because of COVID-19, you cannot claim redundancy. This is set out in the Emergency Measures in the Public Interest (COVID-19) Act (pdf) and applies from 13 March 2020.

This rule has been extended to last until 30 November 2020.

Claiming redundancy from your employer

The information below describes the law on claiming redundancy during a short-time or lay-off period. These rules do not apply during the COVID-19 emergency period. See 'Changes to redundancy rules during COVID-19 emergency period' above.

In some cases when you have been in a lay off or short-time working situation for a certain length of time you may be entitled to claim redundancy. A lay-off does not involve the termination of your contract of employment, whereas a redundancy does.

If a lay-off or a short-time working situation exists and has continued for 4 weeks or more, or for 6 weeks in the last 13 weeks, you may give your employer a notice in writing of your intention to claim redundancy under the Redundancy Payments Acts 1967-2014. If the period of lay-off or redundancy has ended, you must do this within 4 weeks.

Unless your employer gives you a counter-notice within 7 days of your notice, you may be entitled to a redundancy payment provided that you qualify for redundancy.

If your employer gives you a counter-notice within the time allowed, it must be to the effect that within 4 weeks of the date of your claim for redundancy, it will be possible to offer you not less than 13 weeks' work without lay off or short time. (It may be difficult for employer to guarantee 13 weeks unbroken employment, given the rapidly changing nature of the COVID- 19 pandemic.)

You should note that if you claim redundancy in this way you are considered to have left your job voluntarily and therefore you lose any right to notice from your employer under the Minimum Notice and Terms of Employment Acts 1973-2005.

However if you have been laid off and you are subsequently made redundant by your employer you do not lose your notice entitlements.

You can get more information in our frequently asked questions on redundancy.

What social welfare payments am I entitled to during lay off or short-time working?

If you have been laid off as a result of the COVID-19 pandemic, your employer may continue to pay you most or all of your pay through Employment Wage Subsidy Scheme (EWSS). The State will pay a subsidy per employee to help keep you in employment. The subsidy amount paid to employers will depend on the gross income of each employee.

If your working hours are reduced to 3 days or less per week you should apply for Short Time Work Support which is a form of Jobseeker’s Benefit.

If your employer has decided to close their business and temporarily lay you off and cannot pay you, you can apply for the new COVID-19 Pandemic Unemployment Payment.

This new payment is for employees and self-employed people who have lost all their employment due to a downturn in economic activity caused by the COVID-19 pandemic. People getting Working Family Payment and students who have lost employment can also apply.

You can read more about Social welfare payments and COVID-19 (coronavirus).

Where to get more information

For more information on your employment rights, contact:

Workplace Relations Commission - Information and Customer Service

O'Brien Road
Carlow
R93 E920

Opening Hours: Mon. to Fri. 9.30am to 1pm, 2pm to 5pm
Tel: (059) 917 8990
Locall: 1890 80 80 90

Page edited: 25 September 2020