Covid-19 poses a threat to businesses in many ways. Employers are having to adapt their practices and procedures to suit this situation but also to ensure their business continuity and viability. Many businesses were forced to close for a period and are currently planning the Return to Work. Others have rapidly adapted to Remote Working. Part of this response to the change could involve pay cuts to employees' salaries or redundancies in a business. While the Redundancy Payments Act 1967 has not changed, there are some key areas that employers must consider:
Emergency Period Extension
In certain circumstances and long periods of lay off and short time, employees had previously been entitled to claim a redundancy payment. Since March 13th, 2020 this law was temporarily changed and is due to be extended for a longer period. Under the Emergency Measures in the Public Interest (Covid-19) Bill an employee will not be eligible to claim redundancy during this emergency period if they were laid off or placed on short-time work for four weeks or more, or 6 weeks in the last 13 weeks.
Under the Redundancy Payments Act 1967, roles can only be made redundant if there are fair grounds to do so. The selection and consultation process must be fair, and objective and employees should only be selected in a transparent and fair manner. The SFA have devised a Step by Step guidance document for employers who are facing this potential outcome. The SFA have provided a webinar titled “How to Manage a Redundancy” to help with this. Employers are advised to consult with the SFA if they are considering making staff redundant due to Covid-19.