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State payment for redundant workers who lost reckonable service
Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar

21 Jan 2022 / employment Print

Top-up for laid-off workers who lost reckonable service

The Redundancy Payments (Amendment) Bill,which has been published today (21 January), will compensate COVID laid-off employees who have lost out on reckonable service, and have subsequently been made redundant.

The legislation allows for a special payment, of up to a maximum of €1,860 tax-free, to bridge the gap in redundancy entitlements.

A worker does not necessarily have to have been in receipt of any form of State payment, such as the PUP or jobseekers, during the lay-off period.

The criteria are simply that the person qualifies for redundancy in the usual way, and was laid off because of restrictions during the emergency period.

Out of pocket

Leo Varadkar (Tánaiste and Minister for Enterprise, Trade and Employment) said that the bill would make sure that people made redundant were not out of pocket because of lay-off due to COVID-19 restrictions.

The maximum €1,860 tax-free would compensate for a person’s break in service due to necessary closures to protect public health, he said.

“Throughout the pandemic, we have aimed to save as many jobs and businesses as possible. Part of that was suspending an employee’s right to trigger redundancy, to ensure already struggling businesses weren’t overwhelmed with costs.

“That provision has now been lifted, and employees can, if they wish, seek redundancy if they have been laid off. We want to make sure workers don’t lose out on payments, and, on the other hand, business owners aren’t faced with a flood of additional redundancy costs, just when they’re trying to get back on their feet.

“This bill provides the best outcome for both employers and their employees,” he said.

Under the existing Redundancy Payments Acts, periods of lay-off in the final three years of service do not count as reckonable service, which had a knock-on effect for COVID-related lay-offs.

The provisions of the Redundancy Payments (Amendment) Bill will plug that gap, through a direct payment from the Social Insurance Fund.

The payment will ensure that the employee being made redundant will receive the same total redundancy payment as though they had not been laid off during the pandemic.

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

Statutory

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.

Gazette Desk
Gazette.ie is the daily legal news site of the Law Society of Ireland