Employer’s guide to lay-offs in Ireland

It’s common for businesses to let employees go on a temporary basis.

As an employer, you may face laying off staff due to a lack of work or financial issues. This temporary form of leave is presented with the hope of returning to work.

Choosing who to lay off and what legal rights still apply can be complicated. However, if you don’t follow the right procedure, you could end up facing discrimination or unfair dismissal claims.

Read all about lay-offs, what makes it different to short-time working, and how to legally select employees for this temporary leave.

What is a lay-off?

A lay-off is when you reduce an employee’s work hours or let them go on a temporary basis.

Laying people off happens when a business has no work available or they can’t afford to hire workers. And depending on the situation, the duration can range from one working day to several weeks.

If an employee is laid off from work, they should expect no work or pay for that period. However, if the lay-off is continuous over a certain period, they may be entitled to claim redundancy.

Are temporary lay-offs in Ireland legal?

In Ireland, there isn’t a specific legal definition or meaning for lay-offs. In labour law, it’s categorised with redundancy.

Under the Redundancy Payments Act (2014), there are three elements that demonstrate your right to lay-off employees. These are when you are:

  • Unable to provide work for your staff.
  • Believe the situation is temporary.
  • Provide notice about the lay-off before the work ends.

What is the difference between a lay-off and short-time working?

Short-time working is when there is a shortage of work, but work still exists (unlike in lay-off cases).

Under the Redundancy Payments Act, short-time work occurs when the employee:

  • Works less than half of their contractual weekly hours.
  • Receives less than half of their weekly pay.

It’s important to note that short-time work isn’t the same as working with reduced hours. This is when the employee receives more than half of their weekly hours or pay.

What are employee rights during lay-offs?

Before any employee can be laid off, they must have legally terms agreed with them. This is normally done by including terms on lay-offs in employment contracts.

If you don’t provide lay-off and short-time working clauses in contracts, you need to secure an express agreement with the chosen employee(s). But only if lay-offs are customary and practiced in your business beforehand.

You must also outline if employees will receive lay-off pay and an estimate for how long it will last. If you fail to do this, you could face a claim for unpaid wages.

Are employees still entitled to holiday benefits during lay-offs?

Employees are still legally employed during lay-offs, and so are entitled to public holiday benefits. But the holiday must fall during the first 13 weeks of their lay-off.

Part-time employees can receive holiday benefits if they’ve worked for 40 hours in the five weeks before the public holiday.

How to manage a layoff in the workplace

You should provide information on lay-offs through employment contracts, policies, and handbooks. This is especially for businesses that practice lay-offs or follows a specific custom.

The main elements that your lay-off rules should include are:

  • Reasons behind the lay-off.
  • Estimate of how long the lay-off might last.
  • Entitlements for lay-off pay and benefits.
  • Expected forms of communication during the lay-off.

Selecting employees for lay-off

Whether you’re dealing with lay-offs, short-time working, or redundancy, selecting employees must be fair and reasonable.

Under the Employment Equality Act (2015), your lay-off selection must not discriminate against these protected characteristics:

  • Age
  • Civil status
  • Disability
  • Family status
  • Gender
  • Member of the Traveller community
  • Race
  • Religious belief
  • Sexual orientation

If an employee thinks they were selected against any characteristic, they may raise a discrimination claim to the Workplace Relations Commission (WRC).

Can you lay off an employee without notice?

You must legally provide a notice period to staff before applying lay-offs or short-time work. Aim to keep them informed throughout the situation.

When you’ve selected employees, issue them with a temporary lay-off (or RP9) form. Without consent, employees may raise a claim for statutory redundancy payment.

Can a laid-off employee claim for redundancy?

Employees can claim for redundancy instead of a lay-off or short-time work (or both). They may believe you cannot offer work anymore and wish to end their employment contract.

You must ensure they understand that a lay-off doesn’t involve a contract termination, but redundancy does.

They can claim for redundancy if the lay-off or short-time work is for:

  • Four consecutive weeks.
  • Six weeks within the last 13 weeks.

Employees can provide their redundancy notice in writing. Here, you must give a counter-notice within seven days of their redundancy notice.

In some situations, they may be entitled to redundancy pay (but only if they meet the legal criteria).

Get expert guidance on lay-offs with Graphite

Lay-off, short-time work, redundancy – deciding which form of leave to apply for can be complicated. But it should always be followed as a last resort.

Without following the appropriate procedure, you could unintentionally cause unfair dismissals. These claims will go through the WRC, where you could face costly legal fees and compensation penalties.

Graphite provides expert guidance on lay-offs and other forms of leave. Our team of specialists can offer expert HR assistance on temporary and permanent contract terminations.

If you have any questions regarding lay-offs or redundancies, please contact our advice line on 01 886 0350.

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