James Carroll (Fianna Fail)
Link to this: Individually | In context

Given that it is now five minutes past midnight, I thank the Minister for Defence for remaining in the House to take this matter. The hour is late and I appreciate the fact that the Minister is present.

This matter relates specifically to the fact that employers have temporarily laid off staff and deliberately decided not to make them redundant in order to avoid paying them the money they have rightfully earned in respect of the period of notice. I thought this was a one-off when a constituent contacted me about the matter. However, I have subsequently been approached by others on the same issue.

As everyone is aware, redundancy occurs when there is a lack of work in a firm or a downturn due to financial circumstances. As an alternative to redundancy, employers may lay off employees or place them on short-time working for a number of weeks. Under the Redundancy Payments Acts 1967 to 2007, there is a lay-off of workers where an employer is unable to provide work but where he or she believes this to be temporary and gives notification of the lay-off before work finishes.

When I studied law in UCD, employment law was one of the key subjects taught. It is because of this that I have a keen interest and specific knowledge of this area. If there is a lay-off of workers or they are placed on short-time working and this continues for four weeks or more, or for six out of 13 weeks, one may give one's employer notice in writing of one's intention to claim redundancy under the Acts to which I refer. However, one must do this no later than four weeks after the period of the lay-off or short-time working has ended. People will obtain their redundancy payments in taking this course of action, but they will not will not obtain what they have earned. In simple terms, they will lose their right to notice from their employer under the Minimum Notice and Terms of Employment Acts 1973 to 2001.

As the Minister is aware, it is the employer who decides initially whether there is redundancy. I am sure he will inform me that if there is a dispute in this regard, the matter should be referred to the Employment Appeals Tribunal which can also be consulted on a raft of employment issues. However, the specific matter to which I refer is not being dealt with and people are left hanging for weeks or months. Two of the people by whom I was contacted had alternative job offers but could not take them up. One of the individuals informed me that he was afraid to do so because of the thought that his former employer would state after a number of weeks that his short-term lay-off period was over and that his services were again required. As a result, the people concerned are not in a position to take up new employment, while obtaining what is due to them from their previous employment.

I hope serious consideration will be given to this matter. The Minister of State with responsibility for labour affairs is examining the position on redundancy and I hope he will give consideration to the specific aspect to which I refer. I look forward to the Minister's reply.

Tony Killeen (Clare, Fianna Fail)
Link to this: Individually | In context

I thank the Senator for raising this matter, to which I am responding on behalf of the Minister of State with responsibility for labour affairs.

The turbulence experienced in the labour market during the past 12 to 18 months has been unprecedented in modern times and presented employers and employees with huge challenges. Unfortunately, in certain sectors the economic downturn has left some employers with little choice other than to radically reorganise and rationalise their business models. In a worst case scenario, this leads to employees being made redundant.

The haemorrhage of jobs from the economy is evidenced by the redundancy statistics published monthly by the Department. These show that the level of redundancies has risen threefold, from just over 25,000 in 2007 to in excess of 77,000 in 2009. While in the first six months of the year there has been some evidence of a levelling off of redundancy figures, the number of job losses remains extremely high. In 2009 the average monthly level of redundancy claims lodged with the Department was 6,000. To date in 2010, this has fallen by 20% to an average of 5,000 per month.

The Minimum Notice and Terms of Employment Acts 1973 to 2001 provide that an employer shall, in order to terminate the contract of employment of an employee who has been in his or her continuous service for a period of 13 weeks or more, give to that employee a minimum period of notice. The Acts prescribe that period of notice which varies according to length of service and ranges from one week's notice for an employee with 13 weeks to two years service to eight weeks' notice for an employee with more than 15 years service. An employee's contract of employment may also provide for other periods of notice which may be in excess of these amounts.

The RP9 form to which the Senator refers may be used by an employer to notify an employee of temporary lay-off or temporary short-time. There is a lay-off when the services of an employee are not required because there is no work available; when the employer expects the cessation of work to be temporary; and when the employer notifies the employee to this effect. There is a short-time arrangement when an employer, because he or she has less work available for an employee than is normal, reduces that employee's earnings to less than half the normal week's earnings or reduces the number of hours of work to less than half the normal weekly hours when the employer expects this reduction to be temporary and notifies the employee to this effect.

An employee has the right to a redundancy lump sum payment by reason of the lay-off or being placed on short-time working where he or she has been laid off or kept on short-time working, or a mixture of both, either for four consecutive weeks or a broken series of six weeks, where all six occur within a 13-week period. If he or she then wishes to claim a redundancy payment, the employee must serve a written notice on the employer stating he or she intends to claim a payment because of a lay-off or short-time working within the period of four weeks after the lay-off or short-time working ceases. An employee who wishes to terminate his or her contract of employment in these circumstances must give his or her employer the notice required by his or her contract of employment or, if none is required, at least one week's notice. The RP9 form may be used for this purpose. The RP9 form may also be used by an employer to give counter-notice to an employee's notice of intention to claim redundancy by offering that employee not less than 13 weeks of unbroken employment starting within four weeks of the employee serving notice of redundancy. The employer indicates in this way that he is contesting a claim for a redundancy payment. An employee who claims and receives a redundancy payment in respect of being placed on short time or lay-off is deemed to have voluntarily left his or her employment and, therefore, is not entitled to notice under the Minimum Notice and Terms of Employment Acts 1973 to 2001.

I appreciate the Senator's concerns that the potential exists for employers to take advantage of the recent economic downturn to retain employees on short time or lay-off indefinitely in an attempt to force them to claim redundancy, thereby losing their entitlement to notice. The legislation attempts to strike a necessary balance for employers in circumstances in which economic realities may force them into temporarily placing employees on short time or lay-off. In such circumstances it allows them to retain trained staff rather than making them redundant. The loss of notice pay in such circumstances may be in the best interests of employees and may serve as an incentive for them to remain in employment as the only way of obtaining some level of employment. Given the numbers of people on the live register, many employees might prefer to endure the temporary pain of being placed on lay-off or short time with the possibility of being reinstated rather than being made redundant or seeking redundancy of their own volition.

It is the intention of the Redundancy Payments Acts to allow for both sets of circumstances and to be fair to both employer and employee. If the Senator is aware of abuses of the legislation, however, he should bring them to the attention of officials in the redundancy payments section of the Department of Enterprise, Trade and Innovation. Disputes on the existence or otherwise of a redundancy situation may also be referred to the Employment Appeals Tribunal for a determination. It is important to note that an employee must make an application for a redundancy payment or seek a determination from the tribunal within 12 months of ceasing his employment. The 12-month deadline applies to the making of a claim to the employer and the making of a claim to the tribunal in a situation where the employer disputes payment of redundancy.

James Carroll (Fianna Fail)
Link to this: Individually | In context

I appreciate the Minister's comprehensive reply. I reiterate that I absolutely accept that an employee who claims and receives a redundancy payment is deemed to have left his or her employment voluntarily. This issue does not relate to employees who want to leave but to employees who have earned their due notice and are deliberately not being given it. I appreciate the Minister's long reply. I will bring the specific cases of abuse to his attention at a later stage.