Workers who have been laid off will continue to be denied their right to invoke redundancy in certain circumstances until 30 November, the Cabinet decided today.

The Minister for Social Protection Heather Humphreys said the continued suspension was necessary in order to protect businesses, avoid insolvencies and prevent permanent job losses.

However, it remains unclear whether a laid-off worker, who cannot afford to wait to be re-hired and takes another job, loses his/her entitlement to redundancy lump sum payments from the original employer, which may have built up over years of service.

Under the Redundancy Payments Act 1967, an employee who is laid off has the right to demand redundancy if the employer is unable to guarantee work within a certain period.

This avoids leaving employees in limbo indefinitely by giving them the right to demand their redundancy lump sum and move on to seek employment elsewhere.

However, when the pandemic struck, there was huge concern that with a tsunami of layoffs looming, hundreds of thousands of people could seek to force redundancy - which would have put pressure on the cash flow of businesses, and possibly forced them into insolvency.

It would in turn have had implications for the State, which picks up the tab where the business cannot through the Social Insurance Fund.

In last March's Covid-19 emergency legislation, the right to invoke redundancy was suspended - and the latest suspension was due to expire on Thursday.

However, the Cabinet decided today to further extend the suspension until 30 November - the fourth extension since the workers' legal entitlement was originally suspended in March. 

Ms Humphreys acknowledged that the decision "will be met with competing views" but said the continued suspension was necessary in order to protect businesses, avoid insolvency, and prevent permanent job losses.

She acknowledged the impact Covid-19 had had on businesses, many of which had been forced to close, as well as the uncertainty for employees who had been temporarily laid off.

The Minister said additional redundancies would expose businesses to further debt when they were facing considerable trading difficulties, and have a serious impact on the potential for a business to recover.

However, she insisted today's Cabinet decision would prevent redundancies while the labour force was facing a significant challenge - with some 210,000 people receiving the Pandemic Unemployment Payment, and 32,200 employers registered with Revenue for the Employment Wage Subsidy Scheme.

"It is considered that an extension of the end-date continues to be important for employees to ensure that they have a continued link to their job and a pathway to return.

"For employers, many still regard their businesses as being temporarily closed or they are operating well below their capacity," the Minister said.

Ms Humphreys stressed that the extension only affected redundancy payments by delaying until 30 November the date when an employee can trigger a redundancy if they have been laid-off or put on short-time work for a period.

She stressed that all other redundancy provisions, including notice periods and a redundancy lump sum to the affected employee, still apply, underpinned by employment rights legislation.

The Minister stated: "It's important to note that the right to claim redundancy has not been permanently removed. Employees who remain on lay-off or short-time work for the requisite period when this emergency measure expires will be entitled to exercise their right to claim redundancy from their employer."

The Department of Social Protection has confirmed that while a person may be temporarily laid off from their usual employment, there is no statutory provision in employment legislation which prohibits them from seeking alternative employment.

The Department said it was advised that if an employee chooses to take up other employment when they have been temporarily laid off from their usual employment, and they remain available to resume their employment with their usual employer, their entitlement to redundancy remains intact but deferred to the end of the emergency period.