Lay off, short-time working and redundancy

Information

Redundancy occurs when you lose your job due to the closure of a business or a reduction of the workforce. This can happen due to lack of work available or the financial circumstances of the firm.

Alternatively, an employer may lay you off or put you on short time for a number of weeks.

Under the Redundancy Payments Acts 1967-2007 a lay-off situation arises where your employer is unable to provide work for you, but believes this to be a temporary situation and gives you notification of the lay off before the work finishes.

A short-time situation arises where, due to a reduction in the amount of work to be done, your pay or hours are less than half the normal weekly amount. This must be a temporary situation and your employer must notify you before the reduction starts.

Rules

The employer should explain to the employees the reason for the lay off or short-time working and keep employees informed of the situation during this time. In both cases these must be temporary situations and your employer must notify you to this effect before they start, ideally by using Part A of form RP9 (pdf). If your employer fails to notify you of the lay off or short-time working, there could be a claim for statutory redundancy payment against your employer.

Your employer can lay you off or put you on short time if it is in your contract of employment or if it is custom and practice in your workplace. Otherwise you may agree to the lay off or short-time working as an alternative to redundancy. If you are put on short-time working, your existing contract of employment is temporarily suspended. You do not have a new contract of employment.

Selection of employees

When selecting employees for lay off or short-time working an employer should apply the same standard of selection criteria as for redundancy. The criteria should be reasonable and applied in a fair manner. For example, the custom and practice in the workplace may be last in, first out or the contract of employment may set out criteria for selection. Under employment equality legislation, the selection must not discriminate against employees on any of the following 9 grounds: gender, marital status, family status, age, disability, religious belief, race, sexual orientation or membership of the Traveller community.

Social welfare payments

If you are laid off or are on short-time working you may be entitled to Jobseeker's Benefit or Jobseeker's Allowance. If you are getting Family Income Supplement this may be affected by the reduction in your working hours.

Claiming redundancy

If a lay-off or a short-time situation exists and has continued for 4 weeks or more, or for 6 weeks in the last 13 weeks, you may give your employer a notice in writing of your intention to claim redundancy under the Redundancy Payments Acts 1967-2007. You must do this no later than 4 weeks after the period of lay off or short time has ended. 

Unless your employer gives you a counter-notice within 7 days of your notice, you may be entitled to a redundancy payment provided that you qualify for redundancy.  If your employer gives you a counter-notice within the allotted time, it must be to the effect that within 4 weeks of the date of your claim for redundancy, it will be possible to offer you not less than 13 weeks work without lay off or short time.

You should note that if you claim redundancy in this way you are considered to have left your job voluntarily and therefore you will lose any right to notice from your employer under the Minimum Notice and Terms of Employment Acts 1973-2001. However if you have been laid off and you are subsequently made redundant by your employer you do not lose your notice entitlements.

Redundancy payment when on short time

If you have been put on short time and then are made redundant your redundancy payment may be based on your pay for a full week. It has been the view of the Employment Appeals Tribunal that when a person is put on short time, that is, less than half their normal weekly earnings, the gross wage for the calculation of a redundancy lump sum is based on a full week's pay.

Duration of lay off or short time

If you do not wish to claim redundancy but the lay-off or short-time situation continues, the question arises as to whether it is a temporary situation. If it becomes apparent that it is no longer temporary then the situation is now a redundancy rather than a lay-off or short-time working. It is the employer who initially decides whether or not there is a redundancy situation. If there is a dispute about this it should be referred to the Employment Appeals Tribunal to make a decision.

Seasonal workers 

In the case of workers who have been laid off for an average period of more than 12 weeks during the 4 years prior to redundancy, the provisions relating to lay off above will not apply until the end of that average period.  If you are a seasonal worker, therefore, there will normally be no question of redundancy until the usual commencement time of your seasonal work.  If you are not then re-employed, the question of redundancy arises, but not until then.

How to apply

You may claim a redundancy payment in a lay-off or short-time situation on Form RP9 (pdf) available from the Department of Enterprise, Trade and Innovation.

If your employer has not paid your redundancy lump sum, you should apply to your employer for it using form RP77 (pdf). If your employer still refuses to pay it, you can apply to the Department of Enterprise, Trade and Innovation for direct payment from the Social Insurance Fund using form RP50 (pdf) as follows:

• If your employer is unable to pay your redundancy lump sum, they should sign the RP50 and submit a letter from an accountant or solicitor stating they are unable to pay and accepting liability for the 40% owing to the Social Insurance Fund. Documentary evidence such as audited accounts should also be included.
• If your employer refuses to pay your redundancy lump sum or if there is a dispute about redundancy you can bring a claim to the Employment Appeals Tribunal using the application form TI-A. This must be done within one year of your dismissal. Then you apply for your lump sum by sending a completed form RP50 together with a favourable decision from the Employment Appeals Tribunal.

You can read more about your redundancy entitlements in the booklet Guide to the Redundancy Payments Scheme (pdf) which  is available free of charge from the Department of Enterprise, Trade and Innovation.  You may also be interested in reading through this list of frequently asked questions about redundancy.

For further information about the Redundancy Payments Scheme contact the Information Service of the National Employment Rights Authority.

Where to apply