Wednesday, 15 September 2021
Ceisteanna Eile - Other Questions
58. To ask the Minister for Enterprise, Trade and Employment if time spent on the pandemic unemployment payment will count towards redundancy entitlements; if he plans to bring forward legislation on this matter; if the suspension of redundancy rights will be lifted at the end of September 2021; and if he will make a statement on the matter. [43750/21]
I would like to ask the Tánaiste if time spent on the pandemic unemployment payment will count towards redundancy entitlements, if he plans to bring forward legislation on this matter, if the suspension of redundancy rights will be lifted at the end of September 2021 and if he will make a statement on the matter.
I thank the Deputy. Reckonable service is service that is taken into account when calculating a redundancy lump sum payment. The current situation is that the law provides that a period of lay-off within the final three years of service before redundancy is not allowable as reckonable service and is not included as service for the purposes of the calculation of the redundancy lump sum payment. Therefore, as matters stand, an employee who is in receipt of the pandemic unemployment payment, PUP, and who was laid off from their employment, that period of lay-off is not allowable for reckonable service. I appreciate that this is an issue for certain employees who have been on lay-off for an extended period of time, as a result of the public health restrictions. This is legally complex for several reasons, but I can assure the House that my Department, alongside the Department of Social Protection, has been examining the matter for a number of months to come up with a fair solution. One the main considerations is to ensure that any proposal does not impose any further financial burden on employers beyond their current obligations under the Act. Indeed, it is unlikely that we would be able to impose such an obligation on them retrospectively. I intend to make announcement in relation to this matter and a solution that we have developed in the coming weeks, because we need to provide fairness to workers facing redundancy due to the pandemic.
As the House is aware, the section 12(A) emergency measure was introduced because the Government was concerned that the financial impact of redundancy claims on employers would have a serious impact on their business and on the economy as a whole. This, in turn, could have resulted in significant insolvency situations and further job losses. It is also considered important for employers to have a continued link to their job and a pathway to return to.
In June, I wrote to every registered business in Ireland to thank them for their efforts to date in keeping people safe during the pandemic and to update them on the suspension of section 12(A). Companies that are genuinely unable to pay will be able to avail of a deferred payment arrangement, as confirmed in the economic recovery plan. The current end date for section 12(A) is 30 September 2021. The Government is not giving any consideration to extending this.
I welcome the Tánaiste’s response. It is clear that this is something that is on his agenda. He is engaging with the Minister for Social Protection on it. He is due to make a statement on the matter in a number weeks' time. That is welcome. I note that ICTU has encouraged the Government to reform employment law in order to deal with this issue. The Tánaiste can appreciate that if you were in receipt of the PUP, you were, by Government mandate, taken out of the workplace. We, in the Labour Party, appreciate that this is a very unusual situation. It is a once-in-a-lifetime pandemic. Government has been forced to respond and not every response will be perfect. I accept the Tánaiste’s bona fides, and the fact that he is dealing and engaging with the other Department on that. Can the Tánaiste give a more detailed timescale than that? Does he envisage that primary legislation may be necessary?
I hope to be in a position to bring a proposal to Government either next Tuesday or the Tuesday after. Obviously, I will have to do so before 30 September, so that people who are triggering their redundancy claims will know where they stand on that. We have had some consultations with the Irish Congress of Trade Unions, ICTU, Irish Business and Employers Confederation, IBEC, and others, as part of this. Potential solutions are being worked on by my Department and the Department of Social Protection, because this potentially brings the Social Insurance Fund into play. There is also work with the Department of Public Expenditure and Reform. It is anticipated that we will require primary legislation.
The legislative programme, which I think was published today, or will be published tomorrow, proposes that our Department will put through six pieces of legislation. One of these relates to redundancy. The purpose is to give effect to our preferred solution. As the Deputy acknowledges, this is not a situation we envisaged when we created the pandemic unemployment payment. We thought people would only be on it for a few weeks. We now have people on it for more than a year. If this period does not count as a reckonable service, they could lose maybe half of their lump sum. That would be very unfair. We are trying to find a solution that is fair.
I appreciate the Tánaiste’s remarks and that the Government is coming from the right place on this. We look forward to seeing the proposals from Government and, hopefully, to being in a position to support the Tánaiste's efforts in this regard.