Law firm William Fry has created a Covid-19 hub on its website to assist clients with information relating to the  businesses implications of dealing with the effects of the coronavirus.

William Fry managing partner Bryan Bourke (pictured) commented: “We are in extraordinary times. The William Fry team is now working remotely, supported by great technology, to ensure delivery of the best standards of service quality, responsiveness and effectiveness. We are absolutely committed to helping our clients and their concerns during this challenging time. We also have a specific COVID-19 Hub on our website to assist you.”

The article below deals with layoffs and short-time working.

Layoff and short-time working

Under the Redundancy Payments Acts, a lay-off situation arises if an employer is unable to provide work to an employee which they are employed to do. A short-time situation arises if an employee's weekly pay or hours falls to less than 50% of their normal weekly pay or hours.

The employer must believe that the lay-off or short-time working arrangement will not be permanent. This belief must be honest and reasonable.

In Association with

The employer must notify the employee in writing (generally, statutory Form RP9) before the cessation or reduction, with notice which is reasonable in the circumstances. A short notice period may be permitted in exceptional circumstances, as may be the case with Covid-19, but this remains to be seen in practice.

Employers should explain the reason for the lay-off or short-time working and keep employees informed of the situation during the lay-off/short-time.

Employers must have a contractual right — or an implied right through custom and practice — to lay off employees without pay. To rely on custom, the employer will need to show that such a practice was reasonable and within the knowledge of the employees. Alternatively, employees could agree to be laid off without pay. 

An employer is generally not required to pay employees on lay-off in exceptional circumstances. The Covid-19 pandemic may qualify, although this remains to be seen.

Failure to notify an employee of the lay-off or short-time working may result in employee claims including for a statutory redundancy payment or non-payment of wages. When selecting employees for lay-off or short-time, the criteria should be reasonable, non-discriminatory and applied in a fair and consistent manner.

Redundancy

If a lay-off or a short-time situation continues for more than four consecutive weeks, employees may provide their employer with written notice of an intention to claim redundancy. Here an employee may be entitled to a statutory redundancy payment but will not be entitled to notice or pay in lieu of notice.

If an employer receives a Notice to Claim, it can issue a counter-notice within seven days of receipt. To do so, the employer must reasonably expect full employment to recommence within four weeks from receipt of the employee notice and that the employee will not be subject to lay-off or short-time for 13 weeks once work recommences.

Income supports

The state is setting up a rebate scheme for employers who continue to pay employees who would otherwise be laid off because the employer's business has had to cease trading due to HSE advice on 'social distancing'. The department of social protection will reimburse employers €203 per week for each employee. The minister has indicated that it will be a "number of weeks" before employers can be reimbursed.

Alternatively, an employee who has been laid off may be entitled to the new COVID-19 Pandemic Unemployment Payment which is available for a six-week period, or can apply for Jobseeker's Allowance.

An employee who is on short-time may also avail of the COVID-19 Pandemic Unemployment Payment or Short Time Work Support. Supplementary Welfare Allowance is also available to employees on lay-off or short-time.

Employees who contract Covid-19 or are medically required to self-isolate in accordance with HSE guidelines may avail of enhanced Illness Benefit for Covid-19 absences. €305 is paid per week under the enhanced scheme, instead of the standard €203 which is paid under standard Illness Benefit.

Practical steps for employers

Prudent employers are advised to review their contracts of employment and applicable policies well in advance of such steps, to clarify whether these options are provided for, and, in particular, whether it is made clear that any lay-off period will be unpaid. 

Where lay-off and short-time are not provided for within existing contractual or policy documentation, an employer may seek to rely on the unprecedented nature of the pandemic to justify such measures by way of exceptional circumstances. These are, however, uncharted waters, and the ability to rely on such a situation has yet to be tested.

As the options of lay-off and short-time are intended to be temporary measures, it is vital that the employer stays in touch with affected staff to keep them updated of the evolving situation.

It is also important to be mindful that, although staff are laid off or working reduced hours, their employment has not been terminated. 

Termination in such circumstances will likely be as a result of a genuine redundancy situation, which may depending on the number of employees involved, triggering a collective redundancy process in respect of which employment law advice should be sought.

• This is edited version of the article published via the William Fry Covid-19 Hub and is available in full here