A special payment has been agreed for employees who were made redundant and who have lost reckonable service while in receipt of the PUP or another jobseekers payment during the pandemic.

“Reckonable service” is the service that is taken into account when calculating a redundancy lump sum payment. 

The  Social Insurance Fund (SIF) payment will ensure workers will get full redundancy entitlements.  

The Section 12A provision of the Redundancy Payments Act 1967 (as amended) will end on the 30 September after it was introduced as an emergency measure in March 2020.

It has been extended six times.

The Department of Enterprise, Trade & Employment received legal advice to the effect that imposing the cost of the layoff period (if it were to be allowable as reckonable service) on employers would give rise to constitutional issues and is fraught with legal risk. 

Short-time

The purpose of the amendment was to effectively suspend an employee’s right to seek redundancy if they had been laid off or put on short-time work due to the measures required to limit the spread of COVID-19.

This move aimed to reduce the pressure on employers who were already struggling and to reduce the number of insolvencies and permanent job losses over the course of the pandemic.

The State will make a special payment of up to a maximum of €1,860, to workers who have lost out on reckonable service while temporarily laid off over the course of the pandemic and who are now made redundant.

Obligations

To support employers, where they are unable to meet their financial obligations in paying statutory redundancy to their employees, the State will fund statutory redundancy payments from the Social Insurance Fund on their behalf. 

The Department of Enterprise, Trade and Employment said that a flexible and discretionary approach will be taken in relation to recovery of the redundancy debt and in many cases the debt can be repaid over a number of years. 

Tánaiste Leo Varadkar said: “Our objective here is to ensure workers aren’t left short and employers aren’t burdened with heavy costs.

“I also know many businesses are still struggling to get back on their feet and I want to assure them that the Social Insurance Fund is available to help if an employer is unable to pay and we will be very flexible when it comes to repayments.

Claim

Minister Heather Humphreys said the measure would restore people’s right to claim redundancy while also ensuring that businesses are not unduly impacted.

“The economy is now substantially reopened, and it is really encouraging to see businesses actively advertising for and hiring new staff.

“However, some jobs, unfortunately, will not return and some people may face redundancy. The new redundancy measure on reckonable service will provide further financial support to people in this difficult situation,” she said.