What are the alternatives to redundancy post-COVID-19?

Last updated: June 22nd, 2022

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When COVID-19 restrictions on Irish businesses finally ease, many employers may wonder how feasible it is to maintain their staff headcount.

The fact is that many businesses may not be able to pick up where they left off before COVID-19 measures kicked in.

Furthermore, the recovery of the economy will take time. That means that each business will have to assess costs, and headcount is likely to be an area discussed.

So, while redundancies are unfortunately likely to be a business issue post-COVID-19, there are alternatives to consider before making an employee’s job redundant.

Reducing salaries

While it’s not exactly an option employees will jump at, reducing salaries can ease the aftershock of COVID-19. If reducing salaries is something you’re considering, you will first have to seek your employees’ agreement to a wage cut.

The alternative for employees who refuse an offer to keep their position on a reduced salary is redundancy. Due to the current situation, employees are more likely to at least consider the chance to stay on with a lower salary.

Layoff and short-time

Generally, employers must have a contractual right to put employees on layoff or short time. Layoffs occur when an employer suspends employment because of a lack of work. Short-time working is a scenario where, due to unavailability of work, employers reduce work hours by more than half.

Having a contractual right will make it easier to take these steps. However, it may still be possible to put layoff or short-time working arrangements in place if the affected staff agree to it. If employees don’t agree to proposed layoffs or short-time working, they face compulsory redundancy.

Can job offers be withdrawn?

If job offers have been made but not yet accepted, businesses should investigate if they can be withdrawn. Candidates who have signed employment contracts but who have not yet started do pose a problem. It may be possible to get them to agree to a period of layoff which would entitle them to receive a social welfare benefit.

Delaying their start date is also another option, though the candidate may be less enthusiastic about the idea as it will disqualify them from making a social welfare claim.

Reorganising your workforce

COVID-19 will likely lead to changes in how certain businesses operate. Before considering redundancy, it’s worthwhile assessing how flexible work options, such as working from home, could allow more employees to stay on with the business.

Annual Leave

Obviously, asking employees to take annual leave won’t reduce your outgoings on salary. However, it might help you to see out a short period where there is little work for employees.

For instance, asking employees to take a day a week for a number of weeks might help you both to make it through a slow business period.

Statutory Leave

A range of statutory leave entitlements exist that could allow employees to take a period of protected leave without breaking their continuity of service. For example, parents with children under the age of 12 are entitled to take up to 22 weeks of parental leave.

Some employees may also be entitled to carer’s leave of up to 104 weeks. This leave is also accompanied by a social welfare benefit. Statutory leave options may not suit all employees, but they’re worth considering if they help you to avoid making redundancies.

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