Government Announces Special Payment for Laid-Off Workers made Redundant After Pandemic

The Government today agreed on a special payment for employees made redundant who have lost reckonable service while in receipt of the PUP or another jobseekers payment over the pandemic. This payment will come from the Social Insurance Fund (SIF) and will ensure workers won’t be left short of their redundancy entitlements.   

Section 12A provision of the Redundancy Payments Act 1967 (as amended), will end on 30 September 2021, as previously agreed. The Section 12A provision was introduced as an emergency measure in March 2020 and has been extended six times.

The purpose of the amendment was to effectively suspend an employee’s right to seek redundancy if they had been laid off or put on short-time work due to the measures required to limit the spread of COVID-19 for the duration of the emergency period. This was to reduce the pressure on employers who were already struggling and to reduce the number of insolvencies and permanent job losses over the course of the pandemic.

The State will make a special payment of up to a maximum of €1,860, to workers who have lost out on reckonable service while temporarily laid off over the course of the pandemic and who are made redundant.

To support employers, where they are unable to meet their financial obligations in paying statutory redundancy to their employees, the State will fund statutory redundancy payments from the Social Insurance Fund on their behalf.  A flexible and discretionary approach will be taken in relation to recovery of the redundancy debt and in many cases the debt can be repaid over a number of years. 

The Tánaiste Leo Varadkar T.D. said:

“The Section 12A emergency provision was put in place at a time when many thousands of businesses were forced to close or severely reduce their operations because of Covid-19. Throughout the pandemic, our economic priority has been to reduce the number of jobs lost and permanent business closures.

“Our objective here is to ensure workers aren’t left short and employers aren’t burdened with heavy costs. I want to reassure workers who have spent the last few months on the PUP or another job seekers payment because of the pandemic, that in situations of redundancy we will provide you with a payment up to a maximum of €1,860, to compensate for the reckonable service that you have lost due to no fault of your own.”

Minister Heather Humphreys T.D. said: 

“Today’s package of measures is a continuation of that approach – ensuring that we restore people’s right to claim redundancy while also ensuring that businesses are not unduly impacted.

“This is a fair and balanced approach as we move from the emergency stage of this pandemic to the recovery stage. 

“The economy is now substantially reopened, and it is really encouraging to see businesses actively advertising for and hiring new staff. 

“However, some jobs, unfortunately, will not return and some people may face redundancy. The new redundancy measure on reckonable service will provide further financial support to people in this difficult situation. 

“Through the government’s Pathways to Work strategy we want to support people through training, further education and reskilling opportunities to give them the tools and most importantly the confidence to get back to work.”

Minister Michael McGrath T.D. said:

“The measures introduced to curtail the spread of Covid-19 brought great disruption to people’s livelihoods and businesses throughout the country.  In response, the Government put in place far-reaching and critical supports to save jobs and businesses.  The Section 12A emergency provision was one of those measures introduced to protect employers.

“Due to the incredible efforts of everyone involved with the vaccination roll-out we are now in a position to start unwinding the many restrictions that were in place to fight Covid-19.  However, the period ahead is one of transition and businesses and workers still require Government support as we return to normality.”

Once section 12A is lifted on 30 September next, workers will be enabled to trigger redundancy and to access redundancy payments in the usual way. In respect of this additional element of a redundancy payment, it is intended payments will become operational in the first half of 2022.

More information can be found here.