Some businesses are more affected than others by the public health restrictions, but what all businesses have in common is the need to keep up to date on a very fluid situation. Everyone is striving to make informed and appropriate decisions and put in place measures that are fair and compliant, all the while planning for the future as we move towards a "new normal" – whatever that may look like.
At this time, employers should certainly be taking stock and assessing what the landscape might look like as we move through May and June. Here, Sandra Masterson Power (Head of Employment & Benefits) highlights some key dates which might serve as trigger dates for employers in their deliberations around workforce resourcing and workforce management.
- Commencement of Phase 2 of the Temporary Wage Subsidy Scheme on 4 May 2020.
- Planned expiry of the period suspending right to request a redundancy payment on 31 May 2020.
- Planned expiry of the Temporary Wage Subsidy Scheme on 18 June 2020.
1. 4 May 2020: Commencement of Phase 2 of the Temporary Wage Subsidy Scheme
Support initiatives such as the Temporary Wage Subsidy Scheme (the Scheme) have protected jobs and maintained the employment relationship (see our original article on the Scheme here). Employers can still avail of the Scheme and from 4 May 2020 the Scheme will enter Phase 2 which will ensure that the subsidy paid to employers will be based on each individual employee's Average Revenue Net Weekly Pay, subject to their maximum weekly tax-free amounts. See here the Revenue guidance on the operation of the Scheme.
Takeaway: Employers can still avail of the Scheme and the move to Phase 2 sees more tailored subsidy payments calculated for each eligible employee.
2. 31 May 2020 – Planned expiry of employees right to request a redundancy payment
Some employers have availed of the Scheme while others have placed employees on layoff or short time comforted by the fact that the right to trigger a redundancy payment has been temporarily suspended by Part 8 of the Emergency Measures in the Public Interest (COVID-19) Act 2020 (Act), which was covered in our previous article.
Part 8 addressed the concern of employers that they would receive multiple notices of intention to claim a redundancy payment from employees on lay-off or short time working which would impact their businesses even more. Part 8 provided for the suspension of the right during "the emergency period" which is defined as the period beginning on 13 March 2020 and ending on 31 May 2020. The Act provides for the emergency period to be kept under review as the COVID-19 situation develops.
Takeaway: It is highly likely and certainly preferable that the 31 May 2020 end date for the Part 8 "emergency period" be extended. If it is not extended, a situation will unfold where employees who have been on temporary layoff will be able to trigger a notice for redundancy payment which will have a significant impact on cash flow and reserves of businesses that are already struggling to keep going during this public health crisis.
3. 18 June 2020 – End of TWSS or move to Phase 3?
The "applicable period" for the operation of the Scheme under Part 7 of the Act commenced on 26 March 2020 for a period of 12 weeks which will expire on 18 June 2020. The Scheme has succeeded in its initial objective of preserving jobs. However, Minister Donohoe has said that the Government can sustain "the multi-billion twelve week TWSS for now, but not in the longer term." There may be some tough decisions ahead. The Act itself requires that in order to avail of the Scheme the employer must have "the firm intention of continuing to employ the specified employee". As the public health crisis has deepened and as the economic uncertainty prevails, many employers' intentions may have shifted and in the coming months and post-18 June it may not be possible to continue to preserve the employment relationship. That being said, and even though the Government has acknowledged that the Scheme cannot be sustained indefinitely, it is likely that there will be a Phase 3 – perhaps for a shorter time period or with a reduction in the subsidy amount.
Takeaway: As businesses take stock and return or adapt to a "new normal", for many it will be operating business at a reduced level which will necessarily involve an examination of current employee roles and resources, which in turn may lead to a redefined workforce and a redesigned organisation.