The Department of Social Protection will pay up to €1,860 towards the cost of making workers redundant who were laid off due to Covid restrictions and impacts.

The measure is contained in the Redundancy Payments (Amendment) Bill, which enterprise minister Leo Varadkar (pictured) will steer through the Oireachtas.

The legislation gives employees who have lost out on reckonable service while they were on lay-off due to Covid restrictions, and are subsequently made redundant, a special payment of up to a maximum of €1,860 tax-free to bridge the gap in their redundancy entitlements.

Under the Redundancy Payments Acts, periods of lay-off in the final three years of service do not count as reckonable service. This means that in the case of redundancies now arising, where the employee may have been on Covid-19 related lay-off for protracted periods, their redundancy entitlement will not factor in those periods.

Employers are liable for the cost of lump sums on statutory redundancy. Varadkar (pictured) said the cost of this additional payment will not be imposed on employers because the pandemic-related restrictions were outside of their control.

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He added that the Department of Social Protection is working on administrative systems to provide for the application and payment processes. The timeline is vague, other than it is expected to be introduced by June 2022.

The amount an eligible worker will receive will depend on the length of time they were placed on lay-off due to Covid before the date they were made redundant.

The calculation for the payment is based on existing statutory redundancy provisions. The maximum to which any employee will be entitled is €1,860 if they earned €600 or more a week and were laid off for the full emergency period.

New Rules For Tips

Minister Varadkar has also published a new Bill which will give customers clear information on where their tips and service charges go. The legislation will also prohibit the use of tips to ‘make up’ contractual rates of pay.

The Payment of Wages (Amendment) Bill will require employers to clearly display their policy on how tips, gratuities and service charges are distributed.

The Bill stipulates that all electronic tips received by the employer must be distributed fairly and in a transparent way and this will be inspected through the Workplace Relations Commission (WRC).

The distribution obligations will not affect businesses where tips are managed by employees themselves, for example under a ‘tronc’ system.

The minister indicated that an employer may take into account certain factors when deciding how to distribute tips, including the seniority or experience of an employee, the value of sales generated by them and the number of hours worked. All employees must be consulted on the policy that is introduced.

• Click here for details on how new Wages Bill will affect hospitality employers