Hundreds of thousands of workers could lose out on redundancy payments if their employment is terminated because time spent claiming the Pandemic Unemployment Payment will not count when calculating entitlements.
The Irish Congress of Trade Unions has urged the Government to reform employment law so that the period spent on the PUP will count towards redundancy payments.
It says that without reform, some employees could lose out on up to a year of redundancy pay having been laid off due to the pandemic through no fault of their own.
At present over 480,000 people are claiming the PUP – which means that while they have been temporarily laid off, there still remains the prospect of a return to work when the pandemic ends.
Normally after four weeks of layoff, a worker would have the right to demand a return to work, or to be made redundant – so that they are not left in limbo indefinitely.
However, last March, the Government suspended this right under Section 12 of the Redundancy Payments Act 1967 amid fears that employers would be faced with a tsunami of redundancy lump sum claims, which would then fall to the State if businesses could not pay.
While that suspension is currently due to be lifted at the end of March next, observers believe it may be extended due to the ongoing pandemic.
Where workers are made permanently redundant, they are entitled to at least two weeks’ pay per year of service (capped at €600 per week).
However, in a letter to a senior official in the Department of Enterprise Trade and Employment on 5 October, 2020, the General Secretary of the Irish Congress of Trade Unions Patricia King noted that at present, the legislation does not provide for the inclusion of periods of layoff from work as “reckonable for service purposes”.
Ms King states: “In the specific instance of Covid-19 where lay-offs have been imposed on workers with no recourse to Section 12 of the Act whereby they can claim redundancy payments it is clear that a double jeopardy has been created.”
“I would request that in such circumstances no worker should be penalised in relation to their reckonable service which have arisen in circumstances beyond their control,” she added.
Ms King also cited allegations that some employers who could not pay redundancy were advising employees who were set to lose their jobs permanently to continue claiming the PUP.
“This is highly unsatisfactory and fails to take into account that these workers are entitled to move on and seek to develop future employment opportunities,” she said.
Speaking to RTÉ News, Ms King noted that a massive tide of redundancies has not yet materialised, because the situation has “stagnated”, with people still laid off on PUP pending developments with the pandemic.
However, she voiced concern about the implications for thousands of workers in businesses that may not survive.
Some have been on PUP consistently for almost a year, she noted, but may not be aware that that period would not count for redundancy calculations.
She said the legislation providing the right to claim redundancy after a four-week period had been intended to avoid workers being left in limbo, and that it had never been envisaged that they could be left in this position for almost a year.
Ms King said the matter had been raised with the government and at the Labour Employer Economic Forum, but that Congress had been told that the Attorney General was considering the matter.
A spokesperson for the Department of Enterprise, Trade and Employment said: “This issue is the subject of discussion with representatives of trade unions and employers.”
In a statement issued this afternoon, the spokesperson said: “The current situation is that the Redundancy Payments Act 1967 provides that a period of layoff within the final three years of service before redundancy is not allowable as reckonable service and is not included as service for the purposes of the calculation of the redundancy lump sum payment.
“So, as it stands, an employee who is in receipt of the Pandemic Unemployment Payment is on layoff from their employment and that period of layoff is not allowable as reckonable service.
“The Department sought legal advice on the matter. It is legally complex for several reasons, and the Department is considering the full implications before any decision is made. The Department will continue to discuss with trade union and employer representatives.”