Anne O'Connell Solicitors | View firm profile
The Redundancy Payments (Amendment) Bill 2022 (“the Bill”) was published on the 21st January 2022. The proposed legislation will amend the Redundancy Payments Act 1967 to provide for payments from the Department of Social Protection to employees who were laid off during the Covid-19 emergency period, beginning on 13 March 2020 and ending on 30 September 2021.
Currently, under the Redundancy Payments Acts, periods of lay-off in the final three years of service do not count as reckonable service, that is, they are excluded from the calculation of the amount of the statutory redundancy payment.
The provisions of the Bill seek to give employees who have lost out on reckonable service while they were on lay-off due to Covid-19 restrictions, and have subsequently been made redundant, a special payment of up to a maximum of €1,860 tax-free. This measure aims to bridge the gap in employees’ redundancy entitlements, therefore, ensuring that the employee being made redundant will receive the same total redundancy payment as though they had not been laid off due to Covid-19.
There are no additional requirements to be eligible for the payment. An employee must qualify as normal for a statutory redundancy payment to benefit. The Bill is restricted to those who are made redundant within the period from 13 March 2020 to 30 September 2024, being three years after the end of the emergency period.
An application for the payment may firstly be made by the employer on behalf of the employee to the Department of Social Welfare and should the employer fail or refuse to do so, then the employee may apply. The amount of the payment will be determined by the difference between the lump sum to which the employee would have been entitled on redundancy had they not been laid off for a period or periods due to Covid-19 and the amount to which the employee is actually entitled on being made redundant.
Take away for employers.
Employers who have had to make redundancies or are anticipating a redundancy situation due to Covid-19 should ensure that all their records in relation to any layoffs during the relevant period are up to date. The Bill provides that a deciding officer is entitled to request information and documentation in support of any application for the payment. Employers should give the employee the necessary information to make the application on termination if it is not going to make the application for the employee. This should avoid an unnecessary data access request being made by the former employee.
Links: https://data.oireachtas.ie/ie/oireachtas/bill/2022/4/eng/initiated/b0422d.pdf
Authors – Ethna Dillon & Anne O’Connell