Dáil Éireann Debate, Wednesday - 27 May 2020
917. Deputy Joan Collins asked the Minister for Employment Affairs and Social Protection if she has considered strengthening Covid-19 emergency legislation in order that an employer will not be allowed to make an employee redundant during the emergency (details supplied). [7626/20]
View answerFirstly, I would like to say that my thoughts are with all workers who are dealing with job losses or facing the prospect of redundancies at this difficult time. I want to assure everybody that my Department is assisting affected workers through its Intreo service to help them in whatever way we can in terms of income supports and job-seeking over the coming weeks and months and will continue to do so.
An all-of-Government approach has been taken to financially support workers and businesses alike during the emergency period. In addition to the existing range of social welfare support schemes, the Government has put in place the ‘National COVID-19 Income Support Scheme’.
This includes-
- the temporary wage subsidy scheme to help affected companies keep paying their employees, maintain the employment relationship and keep businesses viable in order to prevent redundancies;
- the emergency Pandemic Unemployment Payment for both employed and self-employed workers who have suffered a collapse in income.
The emergency legislation which was enacted recently effectively suspends the provisions of Section 12 of the Redundancy Payments Act 1967 (as amended) which relate to the rights of an employee to claim a redundancy entitlement from their employer after temporary periods of lay-off and short-time work during the Covid-19 emergency period. This was done to mitigate against the increased risk of insolvencies in the event of mass redundancies over a short period of time, which would only exacerbate the risk of further permanent job losses and redundancies.
In implementing all of the above the Government has already put in place significant measures which are helping to prevent redundancies.
The proposal to withdraw an employer’s right to make workers redundant could have far reaching and significant unintended consequences, including interfering with individual contracts of employment. Furthermore it cannot be said that all employees will want the redundancy provision removed as is suggested. Employees may have significant service with an employer, and as significant stakeholders in a business be aware that the business is struggling and redundancy may be the better option for some of them. Restricting their right to access a redundancy payment and seek new work opportunities or reskilling opportunities is a very real issue for them.
The proposal could also create a risk to an employee's right to a redundancy payment. The State does not have the power to stop a business closing or to prevent liquidations once the provisions of company law are complied with. Unfortunately the closure of the business will happen in some circumstances and this is a very real concern fir many business right now, including many small businesses endeavouring to stay in business. If the right of the employer to make an employee redundant is taken away this could jeopardise an employee’s right to compensation by way of a redundancy payment while the liquidation of that company is underway.
It is also important to bear in mind why redundancy provisions are used. If a business is in trading and in financial difficulties very often one of the mechanisms used to save that business (which in turn saves some jobs) is redundancy. An employer may downsize their business and reduce their workforce by way of redundancies in order to continue to be viable. If the right of the employer to make employees redundant is removed it could result in more permanent job losses.
Employers have to make decisions on the ongoing viability of their firms in real time and having regard to real circumstances – particularly in circumstances where revenues have collapsed for many firms. Directors of firms have, under company law provisions, very serious and personal responsibilities to ensure that they can continue to trade and not trade whilst insolvent.
Finally and this is important for employees who may be in a position to negotiate a redundancy package with the many genuine employers in our economy - if a company is restricted from making employees redundant and has to retain them on payroll, the assets of that company will dissipate and mean that any negotiated redundancy package has less chance of success.
