Leo Varadkar

The Redundancy Payments (Amendment) Bill provides for a special payment of up to a maximum payment of €1,860 tax-free to bridge the gap in redundancy entitlements for employees who lost out on reckonable service while they were on lay-off and were subsequently made redundant.

Leo Varadkar, Tánaiste and minister for enterprise, trade and employment, 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.”

Under the existing Redundancy Payments Acts, periods of lay-off in the final three years of service do not count as reckonable service. This means that in the case of redundancies now arising, where the qualified employee may have been on Covid-19 related lay-off for protracted periods, through no fault of their own or of their employer’s, their redundancy entitlement will not factor in those periods.

The new bill aims to plug that gap through a direct payment from the Social Insurance Fund. The Department of Enterprise, Trade and Employment said 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”.

Heather Humphreys, minister for social protection, said: “This new scheme, which will potentially add up to €1,860 to a worker’s redundancy payment, will be administered by my department. In addition, government’s employment services strategy Pathways to Work provides a range of employment supports, training and re-skilling opportunities for people who wish to find new job opportunities post-Covid.”

The amount an eligible worker will receive will depend on the length of time they were placed on lay-off due to COVID-19 before the date they were made redundant. 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 in €600 or more a week and were laid off for the full emergency period.

The Department of Social Protection is working on the necessary administrative systems to provide for the application and payment processes, with a view to implementing the payments in the first half of 2022.