1. Introduction

The provisions of the Redundancy Payments Act 1967 relating to lay-off and short time give employees a route to redundancy payment where their work has substantially diminished but their employment has not formally been terminated. The provisions operate as a protective measure against extended periods of reduced or no work.

This article addresses the operation of Sections 11 to 13 of the Act, the procedural conditions for invoking the provisions, and the leading recent decisions.

2. Legislation and Case Law

Section 7(2) of the Redundancy Payments Act 1967 defines redundancy. The provision identifies five circumstances in which a dismissal is by reason of redundancy: where the employer has ceased or intends to cease to carry on the business; where the employer’s requirements for employees to carry out work of a particular kind have ceased or diminished or are expected to cease or diminish; where the employer has decided to carry on the business with fewer employees; where the employer has decided that the work shall henceforth be done in a different manner for which the employee is not sufficiently qualified or trained; or where the employer has decided that the work shall henceforth be done by a person who is also capable of doing other work for which the employee is not qualified or trained.

Section 11 of the 1967 Act defines lay-off and short time. Lay-off occurs where the employer is unable to provide the work for which the employee was employed by reason of which the employer is not paying the employee, with the expectation that the cessation will be temporary. Short time arises where, by reason of a diminution in work, the employee’s pay or hours are reduced to less than half of normal.

Section 12 of the Act provides that an employee laid off or kept on short time for four consecutive weeks, or six weeks in any 13-week period, may give the employer written notice of intention to claim a redundancy payment. The notice must be given within four weeks of the cessation of the lay-off or short time.

Section 13 of the Act provides the employer’s response: the employer may, within seven days of receipt of the notice, give counter-notice that the employer expects to be able to provide the employee with 13 weeks’ continuous employment within four weeks of the counter-notice. If no counter-notice is given, the employee is entitled to a redundancy payment.

The provisions are technical and operate to a precise timetable. Practitioners advising employees should observe the timing requirements carefully; advice should be obtained early in any lay-off situation. 

3. Decision

WRC decisions on lay-off and short-time complaints typically address whether the procedural conditions of Section 12 have been satisfied. The Adjudication Officer will examine the lay-off or short-time arrangement, the timing of any notice given by the employee, and the employer’s response.

Where the procedural conditions have been satisfied and no valid counter-notice has been given, the employee is entitled to a redundancy payment. The payment is calculated under Section 7(2A) by reference to continuous service and weekly pay (subject to the weekly cap).

Where the employer has given a counter-notice, the substantive question is whether the employer is able to provide the 13 weeks’ continuous employment within the prescribed period. The employer’s realistic prospect of doing so is assessed on the available evidence.

Disputes commonly arise on the characterisation of the period of reduced work. Whether a particular reduction amounts to lay-off, short time, or neither, depends on the precise facts of the case. Practitioners should examine the contractual position, the actual pay and hours during the period, and the surrounding communications.

4. Takeaway

For employers facing a period of reduced work, the practical management of lay-off and short-time arrangements requires care. The arrangements should be communicated clearly to employees, with reference to the contractual position. Documentation of the reduction in work and of any communications with employees should be maintained.

Where an employee gives notice under Section 12, the employer’s response should be considered carefully. A valid counter-notice may preserve the employment relationship and avoid an immediate redundancy payment liability. An incorrect or late counter-notice may produce the opposite result.

For employees facing extended lay-off or short time, the Section 12 route may be a useful means of accessing a redundancy payment. Practitioners should advise clients on the timing requirements and the strategic considerations.

Practitioners should also consider parallel implications. A lay-off or short-time arrangement may engage Payment of Wages Act complaints (if the reduction is not contractually authorised), constructive dismissal complaints (if the reduction is sufficiently fundamental), and Working Time Act complaints (if rest and leave entitlements are affected).

5. Further information

This article was prepared for informational purposes only. For further advice, please email enquiries@crushell.ie or contact the offices of Crushell & Co Solicitors.

6. About Crushell & Co

Crushell & Co is a specialist law firm focused on protecting and advancing the rights of employees in Ireland. We offer a nationwide service, advising individuals on a wide range of legal and regulatory issues arising at work, including employment law, employment immigration and workplace accidents and injuries.

We help employees understand their position and options by translating complex legal issues into clear, practical advice. Our approach is tailored to each client, ensuring that our strategy is aligned with their personal and professional circumstances.

Connect: @CrushellLaw or www.crushell.ie