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Bosses may opt for redundancy rounds, in wake of lockdown
Pic: RollingNews.ie

26 May 2020 / employment Print

Bosses may opt for redundancy rounds, in wake of lockdown

The COVID-19 pandemic raises several employment law issues, a new briefing from Business Legal has said.

It points out that while many organisations are fighting for their existence, and drastic measures may have to be taken, the crisis may also offer potential for restructuring.

In blunt terms, if employers were considering a round of redundancies, or if they had specific areas that they were considering targeting, now is as good a time as any to proceed with this, the report says.

Backdrop

This is against the backdrop wherein it is normally difficult to change terms and conditions of employment, and where there is an economic cost to making redundancies over and above the cost of statutory redundancy.

Firstly, terms and conditions of a contract of employment cannot be unilaterally changed, the employment specialists say.

“This is because a contract of employment is first and foremost a contract, and a contract which can be unilaterally altered by one side removes the essence of a contract (i.e. a bargain between two sides).

Constrained

An employer is constrained by European Union law, national law, constitutional provisions, collective agreements and employment regulation orders, case law, and custom and practice.

Notwithstanding all this, it is possible in most instances to change the terms and conditions of employment by agreement between the employer and the employee.

In some circumstances that agreement from the employee is deemed to come through acquiescence (i.e. not objecting to the proposed changes within a reasonable timeframe).

Contract

A lawyer’s rule of thumb for a term and condition to become incorporated into a contract of employment is approximately six months, the Business Legal briefing note points out.

However, in the current crisis many employers will not have the luxury of waiting six months.

Their options are therefore curtailed to such changes as they can make by agreement.

“The reality though, is that faced with an existential threat to an organisation, particularly private organisations, many employees have little choice but to accept substantial changes in working conditions, and terms of employment in return for the continuation of that employment,” the note says.

Layoff

The alternatives to this are layoff, short-time working, or redundancy.

  • Layoff is a form of temporary redundancy, wherein the employee remains employed by the employer, but is simply not required to work for the period,
  • Short-time occurs when an employee’s hours or remuneration is reduced to less than one half of their former level,
  • After four continuous weeks on layoff or short time, or six weeks within a 13-week period, an employee becomes entitled to claim redundancy from the employer.
  • If the employee does not claim redundancy, then absent any other claim, such as a discrimination claim, a penalisation claim, or a claim for constructive dismissal, the layoff or short time can continue indefinitely.

The reality for many employers therefore, is that they can put staff on layoff or short time and see how matters go for a period of time.

It is possible for employees to claim the Pandemic Unemployment Payment if they are on layoff.

Employees who are on short time or layoff can be paid through the Temporary COVID-19 Wage Subsidy Scheme.

Easier

Many employers may decide that it is simply easier to make some employees redundant.

The note points out that while the Workplace Relations Commission is very alive to the prospect of particular employees being targeted for redundancy because the pandemic is seen as an opportunity to get rid of them, it will be very difficult to argue that a specific employee has been targeted, in circumstances where multiple employees are being made redundant at the same time.

Gazette Desk
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