Dáil Éireann Debate, Tuesday - 16 June 2020
962. Deputy Ged Nash asked the Minister for Employment Affairs and Social Protection her plans for a complete moratorium on the facility for employers to dismiss workers on grounds of redundancy during the period in which section 12 of the Redundancy Payments Act 1967 remains suspended; and if she will make a statement on the matter. [10495/20]
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 you 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. It is also important to ensure that employees have a continued link to their job and have a pathway to return to their employment.
In implementing all of the above the Government has already put in place significant measures which are helping to prevent redundancies.
I fully understand that the proposal to withdraw an employer's right to make employees redundant for the same period as the suspension of Section 12 is motivated by a desire to protect employee rights. However, there are considerable difficulties with the principle of the proposal and it could have far reaching and significant unintended consequences, including an interference 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 for 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. The proposal could involve compelling an employer to continue trading. Directors of firms have, under company law provisions, very serious and personal responsibilities to ensure that they are in a position to continue to trade and importantly not to 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.
