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Period of Unpaid Lay-Off Disregarded in Calculating Payment In Lieu of Notice

Facts: The Complainant was employed by the Respondent from November 1989 until March 2020 when she was was laid off due to the Covid-19 pandemic. She received the Pandemic Unemployment Payment (PUP) during this period, and was then made redundant in August 2020. The Complainant was not paid anything by way of notice payment. The Complainant submitted that she was entitled to payment in lieu of notice which she had not received.

Error in Complaint Form: The Adjudicator was satisfied that although the Complainant had mistakenly selected redress under the Redundancy Payment Acts on her Complaint Form, she (the Adjudicator) was entitled to hear the complaint as a complaint under the Minimum Notice and Terms of Employment Acts 1973-2005 (the “Acts”). It was clear from the Complaint Specific Details and from the Complainant’s submissions that her complaint was one seeking payment in lieu of notice pursuant to the Acts. The Respondent was on notice of the nature of the complaint and fully defended the allegation in its submissions. Both parties canvassed issues relating to the non-payment of notice at the hearing of the matter and the Adjudicator was satisfied that the Respondent did not suffer any prejudice as a result of the error.

Issues: The parties were broadly in agreement in terms of the factual matrix of this case. The Complainant was placed on lay-off on 15th March 2020 and was made redundant, following an internal procedure, on 10th August 2020. The Respondent put forward two technical defences to the Complainant’s claim for payment in lieu of notice:

  1. That the Complainant’s redundancy was “in respect of lay-off” and she was not entitled to a notice payment by virtue of section 5 of the First Schedule to the Act.

    The Adjudicator considered section 5 which provides that:

    An employee who claims and receives redundancy payment in respect of lay-off or short time shall be deemed to have voluntarily left his employment.

    The Adjudicator noted that the crucial question was whether or not the redundancy in this case was “in respect of lay-off”. She referred to the provision in section 12 of the Redundancy Payments Act which enables an employee to trigger their redundancy following a period of lay-off. The Adjudicator noted that section 29 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 (the “2020 Act”) specifically provides that this provision does not have effect during the “emergency period

    in respect of an employee who has been laid off or kept on short-time due to the effects of measures required to be taken by his or her employer in order to comply with, or as a consequence of, Government policy to prevent, limit, minimise or slow the spread of infection of Covid-19.

    For that reason, the Adjudicator found that the Complainant’s redundancy was not “in respect of lay-off” within the meaning of the Redundancy Payments Act. As it was not possible for the Complainant to trigger her redundancy, she could not be regarded as having left her employment voluntarily. The Adjudicator found that on that basis she was entitled to a notice payment.

  2. That the Complainant’s average earnings in the 13 weeks preceding her redundancy consisted only of the Pandemic Unemployment Payment (“PUP”) and therefore she was not entitled to a notice payment.

    The Adjudicator referred to section 5(3) of the Second Schedule of the Act which provides as follows:

    …an employer shall pay to an employee, if there are no normal working hours for that employee under the contract of employment in force in the period of notice, in respect of each week in the period of notice, a sum not less than the average weekly earnings of the employee in the thirteen weeks next preceding the giving of notice.

    The Respondent argued that since the Complainant was on unpaid lay-off during the 13 weeks prior to her receiving notice of redundancy, her average weekly earnings were nil and she was therefore not entitled to any notice payment.

    The Adjudicator rejected this argument, referring to a number of cases which provide that where an employee has been laid-off and is subsequently put on notice of redundancy, he/she is no longer on lay-off but is instead on notice of dismissal. The Adjudicator found that:

    In such circumstances, it is clear that the contract of employment temporarily ceased from the date on which the Complainant was laid off, and re-activated on the date on which she received notice of redundancy.

    In these circumstances, the “thirteen weeks next preceding the giving of notice” for the purpose of section 5(3) runs from the 13 weeks preceding the period of lay-off. The Adjudicator found that the Complainant was entitled to eight weeks’ notice at her normal salary of €710 per week, and awarded her €5,680 on that basis

Takeaway for Employers: This case reiterates the position in respect of payment in lieu of notice calculations; that a period of lay-off is regarded as a temporary suspension of employment when calculating the average weekly earnings of an employee with no normal working hours. A period of unpaid lay-off is therefore disregarded for the purpose of determining an employee’s average weekly earnings and it is the 13 weeks preceding an employee’s lay-off that is the relevant period for these calculations.

Link  – https://www.workplacerelations.ie/en/cases/2022/july/adj-00029863.html

Authors – Hannah Smullen, Jenny Wakely and Anne O’Connell

08 August 2022

Anne O’Connell Solicitors

19-22 Lower Baggot Street, Dublin 2


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