COVID-19 Employee Income Supports, Temporary Layoff & Redundancy Q&A

Anthony Brady, Industrial Relations Executive, answers some frequently asked questions on COVID-19 Employee Income Supports, Temporary Layoff & Redundancy.

  1. What is the Pandemic Unemployment Payment?

The Pandemic Unemployment Payment (PUP) is a social welfare payment available to employees and self-employed workers who are out of work on or after 13 March 2020 due to the COVID-19 pandemic.  The payment applies to employees who have been placed on temporary lay-off or made redundant due to Covid-19. The payment also applies to self-employed workers who are out of work due to Covid-19.  The payment was due to end on 10 August 2020; however, it was extended until April 2021. There will be a gradual reduction in individual payment levels linked to a worker’s previous income between now and April 2021. These reductions will bring payments in line with existing social welfare levels over time. The scheme is currently open to new applicants until the end of 2020 and there are three rates of payment as follows:

Earnings Prior to the PandemicPUP Payment Applicable
Under €200 per week€203 per week
Between €200 – €300 per week€250 per week
More than €300 per week€300 per week

It is planned that the above payment rates will be further calibrated in February and April 2021 to taper back to the standard jobseeker payment of €203 from April 2021.

 

  1. What are workers’ pay entitlements in the event that a site closes due to COVID-19?

If a site closes for a period of time due to COVID-19, employers have the option of placing workers on temporary lay-off. Workers who are placed on temporary lay-off are not entitled to be paid by their employer while on temporary lay-off.  However, they should be advised to make an application directly to the Dept of Employment Affairs & Social Protection for the Pandemic Unemployment Payment (PUP). This can be done by logging on to www.mywelfare.ie.  The PUP is a weekly payment (as per 1 above) and payment will be made to the individual in respect of the week concerned. It does not break down into days of unemployment and it is effective from a worker’s first day out of work. (There is no waiting period).

 

  1. What is the Employment Wage Support Scheme? 

The Employee Wage Support Scheme (EWSS) provides supports to employers across all sectors who are negatively affected by COVID-19. To qualify for the scheme, a business must be experiencing significant negative economic disruption due to the COVID-19 pandemic.

The Scheme, which was announced by government in the July Jobs Stimulus Package, was introduced on 31 July and was backdated to 1 July for employees of qualifying employers who did not qualify for the Temporary Wage Subsidy Scheme (TWSS). The EWSS ran in parallel with the TWSS up until 31st August 2020 when the TWSS ceased to operate. The parallel run was to allow certain categories of workers previously excluded from the TWSS to benefit from the EWSS (e.g. seasonal workers and new employees).  Like the TWSS, the EWSS is operated by the Revenue Commissioners.

To qualify for the EWSS, an employer must be able to demonstrate a projected decline of at least 30% in turnover or in customer orders in the period from 1 July 2020 to 31 December 2020 versus the same period in 2019, and that this disruption is caused by COVID-19. Eligible employers will receive a flat-rate subsidy of up to €203 per week per qualifying employee from Revenue. The EWSS re-establishes the normal requirement to operate PAYE on all payments. This includes the regular deduction and remittance of income tax, USC, and employee PRSI. However, a 0.5% rate of employer’s PRSI will apply for employments that are eligible for the subsidy. The level of the EWSS subsidy payment will depend on the employee’s gross pay per week as follows:

Employee Gross Weekly WagesSubsidy Payable
Less than €151.50No subsidy
From €151.50 to €202.99€151.50
More than €203 and less than €1,462€203
More than €1,462No subsidy

When the scheme was first established, it was determined that proprietary directors were not eligible for the Scheme. However, it has since been agreed that the subsidy can be claimed for certain proprietary directors if they meet the following criteria:

  • Meet the eligibility criteria for the EWSS;
  • The proprietary director is on the payroll;
  • Wages were paid to the proprietary director which were reported to Revenue at any stage between 1 July 2019 and 30 June 2020. 

Where a person is a proprietary director of two or more eligible companies, a claim for the EWSS can only be submitted for a single company.

 

  1. Can workers be paid through the EWSS while on annual leave?

Yes. This scheme does not distinguish between pay for hours worked or pay for annual leave etc. Therefore, any time spent on annual leave can be subsidised through the EWSS and treated as if workers were working as normal.

 

  1. In what circumstance is a worker entitled to the State Enhanced Illness Benefit of €350 per week?

To qualify, an individual must be medically diagnosed with COVID-19, or medically certified by a Doctor or the HSE to self-isolate. It will be paid for a maximum of two weeks where a person is self-isolating but will be paid for the duration of a person’s absence from work if they have been diagnosed with COVID-19, up to a maximum of 10 weeks.

The payment is made from day 1 i.e. there is no waiting period.

 

  1. Does a worker have to be certified for a full week to receive the Enhanced Illness Benefit?

No. The payment for Enhanced Illness Benefit will be entirely based upon certification. If, for example, the medical certificate is for 3 days of self-isolation, the worker will receive 3 days payment. Such payments are generated at a daily rate of the weekly amount of €350. If a worker is certified for a period of, for example, 2 weeks and they get a negative test result within that period and are advised that they no longer need to self-isolate can return to work, then they should close their claim by emailing [email protected] or contacting 01 7043300 or 1890 928400.

 

  1. Can a worker receive sick pay from the CWPS in the event that they have contracted COVID-19 or have been medically certified to self-isolate?

Yes. It has been agreed by the Trustees of the CWPS Sick Pay Scheme that sick pay will be paid for medically certified self-isolation for a period of two weeks provided they qualify for the scheme. Those who have been diagnosed with COVID-19 will be able to claim sick pay from CWPS for the duration of their illness. The normal CWPS criteria apply to COVID-19 claims:

  • Workers must have 13 weeks of contributions in the previous 26 weeks.
  • Sick pay is paid from the fourth day of absence for a maximum of 50 days per year and is paid at a rate of €44 per day.

 

  1. What is temporary layoff?

A temporary lay-off (TLO) situation arises where there is a temporary shortage of work and, as a result, workers are not required to work for a temporary period of time. There is no specific duration for TLO, each instance depends on the circumstances. TLO is unpaid by the employer. Workers who are out of work due to the COVID-19 Pandemic can avail of the Pandemic Unemployment Payment (see 2 above).

 

  1. How much notice should be given to workers when placing them on temporary lay-off (TLO)?

Employers should provide workers with a letter outlining that they are being placed on TLO from a specific date. This letter can be used by workers to avail of a state benefit, if applicable. There is no specific notice required by statute, however members are advised to give whatever notice is reasonable in the circumstances.

 

  1. Do workers accrue annual leave while on temporary lay-off (TLO)?

Workers who are placed on TLO, do not accrue an entitlement to annual leave during that period. However, a worker who has not changed employment within the annual leave year and works over 1,365 hours in the annual leave year is entitled to their full annual leave entitlement in line with the Organisation of Working Time Act, 1997.  Regarding public holidays, workers on TLO are entitled to pay for any public holiday that falls within the first 13 weeks of TLO.

Please note that while workers do not accrue an entitlement to annual leave during TLO, service continues to accrue.

 

  1. Can workers claim redundancy when on temporary lay-off (TLO)?

 In normal circumstances, workers who are on TLO for four consecutive weeks, or a broken series of six weeks within a thirteen-week period, are entitled to claim redundancy from their employer in accordance with section 12 of the Redundancy Payments Act 1967. Workers with at least two years’ service are entitled to a redundancy lump-sum payment. However, due to the number of workers placed on TLO as a result of COVID-19, the entitlement to claim redundancy by reason of TLO was suspended on a temporary basis under the Emergency Measures in the Public Interest (COVID-19) Act 2020. The suspension of section 12 of the Redundancy Payments Act 1967 was initially from 13 March 2020 until 31 May 2020, with the most recent extension of the suspension being up until 30 November 2020.

Please note that the right to claim redundancy by reason of TLO has not been removed, it has simply been deferred until 30 November 2020. The extension of the suspension to claim redundancy does not affect workers who are recalled to work from TLO. However, workers who remain on TLO after 30 November next will be entitled to make a claim for redundancy from their employer where they are on TLO for at least four consecutive weeks, or a broken series of six weeks within a thirteen-week period, provided the suspension of section 12 is not further extended. Where a claim for redundancy is made, workers with at least two years’ service will be entitled to a redundancy lump-sum payment.

 

  1. Does an employer have to accept a worker’s claim for redundancy while on temporary lay-off (TLO)?

If a worker makes a claim for redundancy (provided the suspension of section 12 of the Redundancy Payments Act 1967 is lifted on 30 November next) the employer has the option of either offering re-employment or accepting the claim for redundancy. The worker concerned must have at least 2 years’ service before making a claim for redundancy. Where re-employment is being considered, the offer (counter-offer) must be made within seven days of the claim for redundancy compensation; the re-employment must commence within four weeks and should last for at least 13 consecutive weeks.

 

  1. If a worker takes up new employment while on temporary lay-off (TLO), can they claim redundancy after the suspension of section 12 of the Redundancy Payments Act 1967 is lifted?

If the suspension of section 12 of the Redundancy Payments Act 1967 is lifted on 30 November next, then the answer is “yes”.  Section 12 states that any worker who has been on TLO for four consecutive weeks, or a broken series of six weeks within a thirteen-week period can apply for redundancy. If the worker has at least two years’ service, they are entitled to a redundancy payment.  Section 12 was suspended due to COVID-19 up until 30 November 2020 to prevent workers claiming redundancy after four weeks of TLO.  Assuming the suspension is lifted following the 30 November date, the following can apply:

  • A worker can claim redundancy after four weeks of TLO and stay in employment with their new employer;
  • If you have no work to offer, then the worker is entitled to a redundancy payment (provided they have at least two years’ service). They can continue to work for another company.
  • You can contest the claim for redundancy (counter-offer) but only if the company can recall the worker to work. In such a scenario, the worker must be offered work within seven days of the claim for redundancy, the work must start within four weeks of the claim for redundancy and the work must last for at least 13 consecutive weeks.

If the suspension of section 12 stays in place past its 30 November end date, then workers on TLO (regardless of whether they are working for another company or not) will not be entitled to claim a redundancy payment after four weeks of TLO.  They can continue to work for their new employer indefinitely while continuing to be employed (but not working) for the company.

Even if the suspension of section 12 is lifted, workers can remain on TLO, and work for another company indefinitely i.e. while workers have a right to claim redundancy they are not obliged to do so.  However, workers on TLO are accruing service even if they are working for another company. A worker who claims a redundancy payment by reason of TLO forfeits their right to notice.

 

  1. What notice must an employer give to an employee in the event of a redundancy situation arising?

Where a company makes workers redundant, then under the Minimum Notice and Terms of Employment Act 1973, a notice period applies as follows:

 

ServiceNotice Period
13 weeks – 2 years1 week
2 – 5 years2 weeks
5 – 10 years4 weeks
10 – 15 years6 weeks
Over 15 years8 weeks

Where work is available, workers can work out their notice. Alternatively, an employer can pay in lieu of notice. If the option to pay notice in lieu is not a contractual term, express consent should be sought. Notices only applies where the company makes workers redundant or goes into liquidation. Notice does not apply to workers who make a claim for redundancy following at least 4 weeks of TLO (see above).

 

  1. If a worker takes up new employment with another company while on TLO, and your company goes into liquidation, is the worker entitled to statutory redundancy from the Government for their time with the company?

Yes. The worker will still be employed by the company even though they are not physically working for that company (and may be working for another company). Workers with over two years’ service will be entitled to the statutory redundancy payment from the Social Insurance Fund via the Redundancy Payments Scheme.

 

  1. If a worker takes up employment with another company after four weeks of TLO and they then apply for redundancy, and then your company subsequently goes into liquidation, is the worker still entitled to statutory redundancy from the Social Insurance Fund?

Yes. A redundancy situation arises where the employer has no work/goes into liquidation/closes, etc, and as a consequence, the worker is made redundant. If the company goes into liquidation, workers will be entitled to a redundancy payment (if they have two years’ service), even in situations where a worker has applied for redundancy by reason of TLO (provided the suspension of section 12 of the Redundancy Payments Act 1967 has been lifted).  A worker who applies for redundancy, however, forfeits their right to notice.

 

  1. If the company or workers have concerns, where should we direct them? 

If a query cannot be answered by this Q&A document, please do not hesitate to contact the Industrial Relations and Employment Services Department on 01 406 6000. However, if a worker’s query is a health-related one, it may be advisable to direct them to the HSE at https://www2.hse.ie/coronavirus/ or their GP.

 

 

 

5 October 2020


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