A recent survey revealed that a quarter of Irish employers expect to make permanent redundancies in response to the coronavirus crisis. At the same time, more than half are predicted to furlough staff members.
It is expected that the Government will release a support package for businesses but the form and extent of that package is as of yet unknown and it might not be coming soon enough for some employers. While most employers are looking to cut staff costs to survive the coronavirus pandemic, it goes without saying that, where possible, redundancies at this time should be a final resort and not a first option. So before making redundancies, there are other options you should consider. You can also get in touch with us today to find out more and discuss your business.
Coronavirus COVID-19 Wage Subsidy Scheme
The new Coronavirus COVID-19 Wage Subsidy Scheme announced by the government will cover employees who might have otherwise been made redundant or laid off.
This new scheme will allow businesses to retain their staff while recovering 70 per cent of wage costs up to a maximum amount of €410.00 per employee per week. It is up to you whether you can afford to make up the remaining 30 per cent to pay to your employees. This is very flexible as the employee can be furloughed and not working or working as usual from home or the workplace and still avail of this payment.
If, after being asked, any of your employees refuse to go on the wage subsidy scheme, you might have to consider redundancy. Equally, when the scheme comes to an end you may be unable to retain some or all of your staff and may have to consider redundancy. However, you must ensure that you follow the correct redundancy procedures.
During this emergency COVID-19 period, the law on claiming redundancy from an employer has changed if you have been temporarily laid off or temporarily put on short-term work. Under the Emergency Measures in the Pubic Interest (COVID-19) Act you cannot claim redundancy during the emergency period if you were laid off or put on short time work as a result of the COVID-19 pandemic. This emergency period is defined as 13th March 2020 – 31st May 2020 at present but may be extended.
This emergency period is defined as 13th March 2020 – 31st May 2020 at present but may be extended.
Remember – To place any of your employees on the wage subsidy scheme requires their consent.
Find out more
Find out more about what the Coronavirus Wage Subsidy Scheme means for employers in our article here.
Temporary pay cuts and benefit reductions
While under normal circumstances, staff would generally be resistant to any potential pay cuts or reductions in benefits they receive, in the current coronavirus climate you might find they are open to this. Where the alternative could involve job losses or business closures, employees will tend to be more inclined to discuss pay reductions.
Remember – There might be obligations to consult with unions and or employee representatives if such a change is proposed for more than 20 employees. If you are considering making pay cuts, you should always ensure you are paying at least the National Living Wage (or National Minimum Wage for staff aged under 25) and any changes made should be in writing and consent obtained in writing..
Overtime bans and review bonus arrangements
In the first instance, before considering pay cuts, there may be other ways to reduce overall remuneration, such as stopping overtime. While it might be standard practice in your organisation for staff to work overtime, a ban on this could be one of the first steps in money-saving. You could also consider reviewing staff bonus arrangements to see if these can be changed.
These alterations can be very complicated; therefore, it is important to obtain legal advice before making such changes to employment contracts. Get in touch with us today for help and guidance from our Employment Lawyers.
In the current crisis, it is not uncommon that we hear about employers looking for volunteers within the workforce to take unpaid leave. This is another way to stop or reduce the amount of work temporarily. It is a short-term measure and could be used rather than making job cuts right away.
Your employees right to unpaid leave will usually be outlined in their employment contract. But often, it is at the employer’s discretion as to whether leave is granted.
A career break or ‘sabbatical leave’ is longer term and will be a more complicated arrangement and likely to require more documentation.
Remember – The options of both unpaid leave and career breaks require employees’ consent.
In Ireland, employers can require their employees to take holidays, and dictate when these holidays should be taken as long as certain conditions are met. This is provided employees are given adequate notice. Your employer must take into account your family responsibilities, opportunities for rest and recreation that are available to you and to consult with you at least one month before the leave is to be taken. If the notice period is less, then employee consent will be required, and you must get this in writing.
While forcing staff to take holidays isn’t necessarily going to save you money in the short team, it means that you will have your full workforce ready to go when business picks up again, without the interruption of staff holidays.
Contact our Employment Law Team today in Donegal
This guide does not constitute legal advice and is provided for general information purposes only. If you require specific legal advice you should contact one of our lawyers who can advise you based on your own circumstances.
Please note this information is accurate as of 1 May 2020 and is subject to change as official guidance is adapted to reflect the implications of the virus.