15 Mar 2020

Lay-off, short-time working and redundancy

Redundancy occurs when you lose your job due to the closure of a business or a reduction of the workforce. This can happen due to lack of work available or the financial circumstances of the firm.

Alternatively, an employer may lay you off or put you on short time for a number of weeks.

Under the Redundancy Payments Acts 1967–2014 a lay-off situation arises where your employer is unable to provide work for you, but believes this to be a temporary situation and gives you notification of the lay off before the work finishes.

A short-time situation arises where, due to a reduction in the amount of work to be done, your weekly pay is less than half your normal weekly pay or your hours worked are reduced to less than half the normal weekly working hours. This must be a temporary situation and your employer must notify you before the reduction starts.

COVID-19 (coronavirus)

If your employment is affected by coronavirus, you can read our document on Employment rights during the COVID-19 restrictions.

Rules

The employer should explain to the employees the reason for the lay off or short-time working and keep employees informed of the situation during this time. In both cases these must be temporary situations and your employer must notify you to this effect before they start. The best way to do this is by using Part A of form RP9 (pdf). If your employer fails to notify you of the lay off or short-time working, there could be a claim for statutory redundancy payment against your employer.

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.

Selection of employees

When selecting employees for lay off or short-time working an employer should apply the same standard of selection criteria as for redundancy. The criteria should be reasonable and applied in a fair manner. 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.

Social welfare payments

If you are laid off or are on short-time working you may be entitled to Jobseeker's Benefit or Jobseeker's Allowance. If you are getting Working Family Payment this may be affected by the reduction in your working hours.

Claiming redundancy

If a lay-off or a short-time 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 - see 'How to apply' below. 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 allotted time, 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.

You should note that if you claim redundancy in this way you are considered to have left your job voluntarily and therefore you will 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.

Redundancy payment and notice when on short time

If you have been put on short time and then are made redundant your redundancy payment may be based on your pay for a full week. It has been the view of the Employment Appeals Tribunal (now the Workplace Relations Commission) that when a person is put on short time, that is, less than half their normal weekly earnings, the gross wage for the calculation of a redundancy lump sum is based on a full week's pay.

Notice: When your employer gives you notice, your notice entitlement is based on your full-time work. When you were put on short-time work, your contract of employment was temporarily suspended. When your employer decided to make you redundant, he or she had to re-activate your contract in order to dismiss you on grounds of redundancy. If you were made redundant and you were not required to work out your notice you are entitled to payment in lieu of notice which is your normal pay for that notice period. This means that your notice entitlement is based on the hours of work in your contract of employment, not on the short-time hours of work.

Duration of lay off or short time

If you do not wish to claim redundancy but the lay-off or short-time situation continues, the question arises as to whether it is a temporary situation. If it becomes apparent that it is no longer temporary then the situation is now a redundancy rather than a lay-off or short-time working. It is the employer who initially decides whether or not there is a redundancy situation. If there is a dispute about this it should be referred to the Workplace Relations Commission to make a decision.

Seasonal workers

In the case of workers who have been laid off for an average period of more than 12 weeks during the 4 years prior to redundancy, the provisions relating to lay off above will not apply until the end of that average period. If you are a seasonal worker, therefore, there will normally be no question of redundancy until the usual commencement time of your seasonal work. If you are not then re-employed, the question of redundancy arises, but not until then.

How to apply

If you have been laid off or on short-time working for 4 weeks or more, you may give your employer notice of your intention to claim a redundancy payment on form RP9 (pdf).

If your employer has not paid your redundancy lump sum, you should apply to your employer for it using form RP77 (pdf). If your employer still refuses to pay it, you can apply to the Department of Employment Affairs and Social Protection for direct payment from the Social Insurance Fund. This must be done online using form RP50 as follows:

If your employer is unable to pay your redundancy lump sum, they should sign the RP50. They should submit a letter from an accountant or solicitor stating they are unable to pay and accepting liability for 100% of the lump sum owing to the Social Insurance Fund. Documentary evidence such as audited accounts should also be included.
If your employer refuses to pay your redundancy lump sum or if there is a dispute about redundancy you can bring a claim to the Workplace Relations Commission. You must use the online complaint form available on workplacerelations.ie. This must be done within one year of your dismissal. Then you apply for your lump sum by sending a completed form RP50 together with a favourable decision from the adjudicator of the Workplace Relations Commission.