Lay off, Short time, Reduced working week

What to do when facing a temporary economic challenge

When you hire a new employee, you probably do not give much thought to economic difficulties down the line. That is why your contract of employment should deal with that contingency.

If you do not have a clause in the terms and conditions of employment allowing for the introduction of lay off or short time working, then you cannot introduce them without the agreement of your employees.

What is a temporary lay off?

If you are unable to provide work for your employee, and you believe that this is a temporary situation then you should consider the option of temporary lay off. You must notify the employee of the lay off before the work finishes. It is best to consult with your employees and explain the reasoning behind the decision to introduce lay off. It is a difficult topic, but by communicating with your staff it can strengthen morale when the lay off period is over and work has resumed.

The Redundancy Payments Acts 1967 – 2012 provides a form RP9 download here for providing the necessary information to each employee. Failure to notify could result in a claim for redundancy payment. A lay off is where there is a complete halt in work available for a temporary period.

What is short time working?

It arises in similar circumstances to a lay off. The main difference is that some work is available. When working hours are reduced by more than 50% of their normal rate.

Claiming redundancy payment

Employees who have been on lay off for 4 or more consecutive weeks or short time for a total of 6 weeks in a thirteen week period, may claim redundancy payments.

What about a reduced working week?

This is where an employee is working 50% or more of their normal hours . They cannot claim redundancy in those circumstances and therefore the implementation of a reduced working week must be by agreement.

The benefits of consultation

The loss in available work is a stressful situation for you as well as your employees. By consulting with your staff it helps to build trust and bring about change. Your employees will prefer to hear the news from you. The rationale for reduction in hours available will let staff see that it is due to circumstances beyond your control. You may well get some positive input from staff members on how to introduce efficiencies in work practice. The key to effective communication is preparation,clarity and moving forward.