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Brexit - The Urgent Need To Be Prepared

Brexit – The Urgent Need To Be Prepared

In another lifetime we spoke regularly about the looming threat to Irish business that was Brexit. With the Brexit date of January 1st now fast approaching, Brexit preparations join the long list of issues facing Irish businesses going forward. Irish businesses are currently under more pressure than ever before with the current Covid-19 crisis and with a recent survey by Enterprise Ireland finding that just 42% of businesses feel prepared for Brexit, the time to act and prepare is now.

Taoiseach Micheál Martin has recently stated amidst negotiations that a failure for the EU and Britain to reach an agreement on post-Brexit trade would be “very, very damaging all-round”, and he re-positioned Brexit as an issue economically on par with Covid-19:

“We’ve all had a very significant shock to our economic system because of Covid-19, the last thing we need now across all of our respective economies is a second major shock”.

With this in mind, and despite all other issues currently facing us, we advise early preparation for Brexit, as it is essential to prepare as much as possible. As the relationship between Britain and Ireland is soon to change, there will now be additional hoops for Irish businesses to jump through in order to trade with Britain. This week we will step away from the usual topics associated with Covid-19 and focus on the issue of Brexit and ways in which Irish businesses can be Brexit ready.

EORI Number

As we have recently discussed, one of the most urgent steps that Irish businesses need to take ahead of Brexit is to register for an EORI (Economic Operators Registration and Identification) number. This number is essential for all businesses importing and exporting goods into the European Union. Applications are made through the Revenue Online System (ROS).

Brexit Readiness Checklist

A helpful way of ensuring you have all Brexit bases covered is to check in with your Local Enterprise Office and avail of their ‘Brexit Readiness Checklist’. This may assist you in identifying any areas of weakness that need to be addressed before January 1st and show you the steps that need to be taken to prepare your business for Brexit.

Customs Issues

One of the main changes which will arise on January 1st for Ireland is the new scenario of facing customs issues in trade between Ireland and Britain. As we have long relied on trade routes with Britain, this will be a major stumbling block to be prepared for and will require your product to be priced with this in mind.

The Clear Customs Virtual Training:

One major issue facing Irish trade with Britain going forward will be the issue of customs. As this will be an entirely new stumbling block between Britain and Ireland, it is advised to research and review any areas in which this may be an issue for your business. Many businesses may not deal with customs in house and will need training in this area.

With this area of confusion in mind, Skillnet Ireland has created a new free of charge online training programme (The Clear Customs Virtual Training Programme) to assist businesses in dealing with the increased customs requirements that will arise as a result of Brexit. Advance training will reduce the likelihood of delays and disruptions for customers and business owners.

The programme will be available to all eligible businesses and will be run as part of the “Getting Ireland Brexit Ready” initiative. Visit the Skillnet Ireland website for full information and criteria.

The Ready for Customs Grant:

Enterprise Irelands “Ready for Customs” grant has been set up to provide companies with the financial assistance they may require as a result of Brexit. Once Brexit occurs, companies may incur additional costs in hiring in house customs officials, mobilizing existing staff to other locations for customs related roles. The grant allows for €9,000 to be made available for each full-time employee as well as €4,500 available for each part-time employee. Repayment may be required if it is established that a customs role was not sustained. Applications will be accepted until December 15th via Enterprise Ireland’s online portal. Visit Enterprise Ireland’s website for full details and eligibility criteria.

Deferred Payments:

Deferred payment can be applied for via Revenue and can allow the deferral of the payment of import charges until the month following import. There may be other reliefs available to you, we advise researching via the Revenue site to see what is available.

Communication:

With the issue of customs, open communication will be key. Communicate with your courier’s & logistics carriers so that you have the full picture of your product’s journey going forward. In uncertain times, knowledge is key.

Funding

We have recently discussed the funding opportunities available to Irish SMEs due to the Covid-19 pandemic, and with Covid rightfully taking up so much airtime, it may slip the notice of many that there are still some funding options available to assist in the Brexit transition for Irish businesses.

Brexit Loan Scheme:

The Brexit Loan Scheme is operated by the SCBI (Strategic Bank Corporation of Ireland) and is intended to assist with liquidity issues that may arise as a result of Brexit and makes funds of up to €300 million available to Irish businesses. Applications can be made through the SCBI website.

Ready for Customs Grant:

The Ready for Customs Grant was announced in the July Jobs Stimulus Package. It was announced that Enterprise Ireland would manage a new fund to assist Irish businesses to increase their capacity to manage the new customs processes ahead. Eligible businesses should visit the Enterprise Ireland website for full information.

Brexit Information Hub

In terms of overarching preparedness, it is advised to visit the Government’s new Brexit Information Hub which is intended to help business prepare for Brexit and beyond. This new service is free of charge and provides information, resources and webinars for all businesses.

We hope that this information assists you in some way to get ready for these further business changes. As always, should you have any concerns or queries about these or any other business and financial issues, please don’t hesitate to contact us here at EcovisDCA where we remain open and ready to help. 

Brexit - The Urgent Need To Be Prepared

Brexit – It’s All Customary

It seems so long ago that one of the largest looming threats to Irish business life was the notion of Brexit and the atmosphere of uncertainty that surrounded not knowing what form Brexit was to take. Obviously with the current Covid-19 emergency there are much bigger threats to Irish businesses, but Brexit remains a very real issue that we need to be aware of.

If your business trades directly with the United Kingdom, there will obviously be some changes to your daily business life which it is important to prepare for. From January 1st, 2021, all goods imported into Ireland from Great Britain will be subject customs processes.

As we have discussed previously, one of the most vital ways to prepare for these changes is to register for an Economic Operator Registration Identification (EORI) number, we recommend completing this step ASAP if you have not done it already. This can be done through Revenue’s MyAccount online system.

Once you have your company’s EORI number you must then decide if all customs work will be completed in-house if you feel competent to do so, and have the required software and access to Revenue’s customs systems. If you are not comfortable with completing customs work yourself, you can engage a customs agent to work on your behalf.

We hope that this information has been of use to you and your business, and as always would like you to know that we are here for you and your company at any time should you have any queries.

The SME Credit Guarantee Scheme

The SME Credit Guarantee Scheme

We have discussed Covid-19 business supports at length since the onset of this global emergency, while also discussing the vital nature of the SME area in Ireland. SMEs make up a huge portion of Irish businesses, and whilst last years looming Brexit panic may have seemed like an enormous threat to their business activities, this year has proven the ultimate challenge. With this in mind today we will be discussing another area of assistance for these types of businesses both in the wake of Covid and in the realm of what the new normal will look like.

The SME Credit Guarantee Scheme is intended to encourage additional lending to SMEs, something we can all agree is absolutely essential. This scheme offers a partial Government guarantee of 80% to banks against losses, essentially placing the Government as a guarantor against the SME’s loan. The scheme is aimed at SMEs facing difficulty in accessing traditional lending and is operated on behalf of the Strategic Banking Corporation of Ireland (SCBI) and is accessible from lenders such as AIB, Bank of Ireland and Ulster Bank. These loans are available to fund working capital, refinancing current Covid19 funding and also in order to invest in your business so it can adapt to the current emergency.

Loans range from €10,000 to €1million and can have a term of up to 7 years. A guaranteed premium will apply to be paid directly to the Government. The scheme is available until December 2020. We recommend checking in with your local banking branch for further information and eligibility requirements.

As always, we here at Ecovis DCA are available should you have any concerns or queries on any business or financial matters.

For more information visit Enterprise.gov.ie

The Phased Payment Plan

The Phased Payment Plan – (PPA)

We have dedicated ourselves over the past couple of months to sharing important information with our clients and friends, information which could assist in keeping businesses alive and kicking during such a difficult time, as our country begins to play hopscotch between the levels within the Living with Covid Plan.

As we discussed in recent weeks, a number of extensions have been granted which may assist businesses in filing on time, despite the ongoing challenges posed by the Coronavirus Emergency. It was announced recently that companies would be given more time to pay any outstanding tax bills to Revenue using a payment plan at a discounted rate of interest and would have until the end of September to agree.

Previously the July stimulus package allowed the warehousing of Covid tax debts until a period of reopening, as well as offering a level of amnesty on non-Covid tax debts. This saw a phased payment plan (PPA) enacted by Revenue wherein companies could repay their outstanding dates at a 3% interest rate over a phased plan. The deadline for putting this arrangement in place has now been extended to the end of October, which may allow for many other companies to avail of this plan.

Revenue themselves issued a statement stating that the extension was due to the challenges faced by taxpayers and tax agents during this time, while Collector General Joe Howley state that:

“The 3% interest rate available to taxpayers under this measure is a significant reduction from standard interest rates of 8% to 10% per annum that normally apply to late payments of tax. I strongly encourage the uptake of this opportunity and of the extended deadline that now applies”.

Another bonus to partaking in this PPA is that your company may qualify for tax clearance as a result of utilising this plan of debt payment.

Visit the Revenue site for more information on this and other matters, including a comprehensive booklet here Revenue information booklet .

We hope that this information is of use to you, and as always, we are fully available should you have any queries or concerns on any business and financial matters.

Research and Development (R&D) Credit: Appointment of expert to assist in audits

Revenue have recently released a manual setting out the Revenue procedure for appointing and briefing an independent expert to assist in evaluating the science test in R&D tax credit audits.

By way of background, each year, Revenue’s Incentives unit places an advertisement on the public procurement website, www.etenders.gov.ie1 , inviting applications for placement on a panel of experts to advise in relation to claims for tax credits in respect of incremental expenditure incurred wholly and exclusively on R&D.

Applications for membership of the panel will be accepted at any time during the year. In order, to be eligible to apply for a place on the panel, individuals must hold a relevant PhD or experiential equivalent. Where an independent expert is required in a field that is not represented on the panel formed from the above process, the Incentives unit will identify suitable experts and approach them with a view to their joining the panel.

The appropriate timing for appointing an independent expert will vary from case to case. In some cases, it will be necessary to appoint an independent expert at the outset of a review while in others one may only be required where Revenue and the company reach an impasse in relation to an aspect of the science test.

Independent experts should not be engaged to explain the science: they should only be engaged where there is a doubt that the science test has been met.

Full details of the manual and procedure can be found here

 

 

5 Tips for leading your company out of a crisis

Getting out of a crisis is difficult and requires extraordinary measures and great efforts from a company and its people. Since we’re here to help, we’ve listed 5 tips for leading your company out of a crisis or turnaround situation. Read on and make smart use of these tips.

1. Identify (and solve) the problem

The first step to overcoming a crisis is to identify the main problem that caused it. You can’t deal with a crisis until you determine its core issues. It can be caused by internal factors such as poor financial assistance by management accountants or external factors such as natural disasters like the COVID-19 pandemic. To solve the causes of underlying problems, you should analyze the common signs of distress listed below.

Distress signals

  • Declining or negative cash flow;
  • Declining stock price;
  • Regulatory inquiries;
  • Large or unplanned workforce reductions;
  • Increase in outstanding accounts payable;
  • Resignations of key finance staff;
  • Management turnover;
  • Shrinking EBITDA (Earnings before interest, taxes, depreciation and amortization) margin.

2. Find (and retain) talented people

One of the few good sides of a crisis is that the opportunity arises to find the next level of talent in an organization. As a turnaround manager, you should look beyond the leadership team for people with institutional knowledge. They know all the ins and outs of the company and are essential to realizing the impact of potential changes on the business. Be aware though, in many cases, they are the dissatisfied ones, unhappy with the company’s performance. But because of this, they are willing to point out the painful truths – and that’s just what needs to be done on the road to leading a company out of a crisis.

You should also keep an eye out for people that want to add value and impact. In most cases, you won’t find these people sitting around the table at the beginning, but two or three levels down – waiting for an opportunity to be part of something greater than themselves. Retaining these people isn’t always about money and bonuses: it’s about figuring out their individual needs and get them involved.

3. Approaching financial experts

A crisis is usually not the result of a single decision but an accumulation of multiple unsound decisions. Trying to deal with it by yourself and not asking for help can be an unsound decision. Financial advisors are adept at solving cash flow issues that are stifling the growth of an organization. Their strategies can be useful in a crisis scenario that requires you to make hard choices as well. Getting help from experts such as chartered accountants and business support advisors can lead your company out of a crisis.

4. Concentrate on cash

In general, the board and management of most companies focus on complex, long-term metrics like EBIT and turnover. There’s nothing wrong with that, but unpleasant surprises are waiting when no one is concentrating on cash, especially during a crisis. So, the opposite needs to be done to keep a company financially healthy. The best way of doing this is by finding out which investments are making or burning cash, and by subsequently bringing your business back to its fundamental element of success.

Monitoring your cash flow will help you understand your company’s income and expenses. Every asset the company owns, from investments, physical assets to services rendered should be numbered and assessed for monetary value. When going through a crisis, it is critical to make sure employee salaries, credit payments and invoice payments can be met. You should also consider loans to ease through the current deficit. But make sure to not burden yourself further since banks and other financial institutions charge high interest on loans.

5. Dare to criticise your own business plan

The best thing you can do to avoid distress is to periodically review your business plans and see how the company scores on operational and market performance. Find out where you stand as a company using essential financial and cash flow milestones, and do the same concerning your business and competitors. If that shows that you’re not moving with – or outpacing – the rest of the industry, then your business plan may be out-of-date.

Conclusion

According to recent reports, the corporate crisis has increased in Ireland due to the recent COVID-19 pandemic. Getting out of a crisis may take some time and effort since it can’t be controlled instantly. At last, don’t forget to analyze your past mistakes, get help from experts like business advisors and accountants, make an effective strategic plan and manage your company’s finances. By following the steps mentioned above, you will be able to recover and overcome the ongoing crisis.

Limiting the Impact of Cybercrime

This new crisis of Covid-19 presents a number of unforeseen challenges to companies, with many needing to create a new standard for working remotely, or where this is not possible the requirement becomes to seek funding, reduce employee numbers/hours or close temporarily.

One of the more unexpected challenges of this time is the resurgence of cybercrime. Cyber criminals tend to utilize major news events as an opportunity to mount a criminal campaign and the Covid-19 crisis is no different. This campaign can take many forms. One of the most common at present being the false emails issued regarding a change of banking details, luring the receiver into issuing payments to the wrong account at what is already a deeply difficult time for companies.

Des Ryan, solutions director for Microsoft Ireland has explained this new resurgence is an attack of opportunity as cyber criminals tend to prey on events which may weaken the defences of a business, in this case the shift to remote working situations.

“Cyber criminals are opportunistic […] we are definitely seeing Covid-19 related attacks as attackers are just using this to find the weak link.”

It is also suggested that cyber criminals are merely adapting their usual tactics to profit from the current crisis. The current breed of cyber criminals is known for sending false emails detailing a change of bank details or requesting a change to Revolut (which would ensure that the funds are transferred with immediate effect). There have also been a number of fake charity accounts set up purporting to benefit the current Covid-19 crisis. These criminals are preying on companies who may not have been prepared to work remotely and have had to set up a temporary system quickly and without training and protection in place and targeting staff members who are now outside of their comfort zone and possibly distracted with their surroundings. Utilising personal laptops and phones etc. may also be a point of weakness as these will not be as secure as those in the workplace.

Many are already feeling the strain of this current atmosphere of anxiety and so it seems We are all protecting our staff health during this time, but how can we protect the digital health of our business at what is already an intense time?

  • Consider setting staff up with work laptops and phones where necessary. This will ensure that the devices are as protected for home use as they are within the office environment. Having equipment to hand that requires multi-step authentication will provide extra security.
  • Where possible, if a work laptop is not issued, staff should try to ensure that the computer is used only for their work during this time if they deal with sensitive information.
  • Online security training may be a good way for staff to utilize this possibly quieter time to upskill.
  • Remember and remind your staff of the basics of verifying the origin of an email or phonecall before dealing with any bank details. Often, false emails can be incredibly convincing until you hover over the email address and notice that it isn’t correct.
  • Ensure that all staff are aware of these targeted campaigns and are extra vigilant when dealing with any bank details or personal details.

We hope that this information will be of benefit to you and your company and that you and your staff are staying healthy and well in these difficult times. We are as always available should you require any advice or guidance on any business of financial matters.

Euro Currency

Alternative Lending

Flender

Flender Ireland  is a Peer to Peer Lender for small and medium sized business. It is authorised by the UK Financial Conduct Authority. Flender offer the  following products:

 

Term Loans

Flender offers businesses access to fast funding up to €300,000. Get a credit decision within 6 hours and receive funds within 24 hours. Terms range from 6 to 36 months, with rates starting as low as 6.45%.

In order to apply for a term loan companies / sole traders need:

  • Completed Application form
  • Last 2 years Filed Accounts – Unabridged version with P & L and Balance Sheet
  • Last 2 years Revenue Filed Form 11s (if sole trader)
  • Up to date Management accounts if available
  • Last 6 months bank statements
  • Up to date tax cert – (Tax Ref Number & Access Number ID)

Applications are made on line at : https://www.flender.ie/users/registration/borrower

 

Merchant Cash Advance

Online merchants and other businesses that conduct a majority of their sales online are prime candidates for our MCA product. Since businesses of this nature receive payment primarily via credit card purchases, the monthly payment amount is less when a business is making less revenue and increases when the business makes more revenue. If you earn revenue via check or cash, an MCA probably isn’t right for you.

 

  • Works with natural trade cycles – ideal for retail, hospitality and service businesses
  • Repayments made daily as a small percentage of card terminal revenues
  • Lump sum funding from €10,000 to €250,000
  • Terms from 3 to 12 months
  • Repayments made directly through merchant card processors

 

For further information please contact:

Ecovis DCA

Stephen Connolly – Stephen.connolly@ecovis.ie

Dennis Duffy  – dennis.duffy@ecovis.ie

 

Flender

Colin Canny  – colin.canny@flender.ie

 

Linked Finance

Covid 19 Emergency Loan Product

Linked Finance has launched a Deferred Start Loan for businesses affected by the Covid-19 pandemic. It means businesses can get access to working capital now, with the reassurance of no repayments for the first 3 months.

After the first 3 months payment-free, the loan is then repaid over a 12 month period.

Loans are available up to €100,000 to businesses that are trading for at least 2 years and have a (pre-crisis) annual turnover in excess of €100,000. As with their standard loans, the application process is very simple, just three standard documents, no projections and a credit decision will be given in 24 hours

Any established and creditworthy business, whether it is a limited company, sole trader or business partnership, can apply for a loan on Linked Finance.

In order to apply for this facility companies / sole traders will need:

  • Last 6 full calendar months bank statements i.e. Sept 1st to Feb 29th.
  • Proof of overdraft (IF ANY) Even online screen-print is fine
  • Latest full set of accounts to include Admin Expenses breakdown

Some conditions apply. These include:

  • If you are a sole trader, you must be a permanent resident of Ireland.
  • If your business is a partnership, it must have a permanent place of business in Ireland and at least half of its partners must be permanent residents of Ireland.
  • If your business is a limited company, it must be registered with the Companies Registration Office (CRO).
  • It must have filed accounts with the CRO (if required to do so) at least once and at least half of its directors must be Irish residents.
  • Your business must have been actively trading for at least the past two years.
  • Your business must meet our minimum credit risk and fraud criteria.
  • Your business must not have any outstanding judgements for more than €250.
  • In special circumstances, we can support younger companies who have demonstrated strong growth potential over a shorter trading history but this is at Linked Finance’s sole discretion.

For further information please contact

Ecovis DCA

Stephen Connolly – Stephen.connolly@ecovis.ie

Dennis Duffy  – dennis.duffy@ecovis.ie

Linked Finance

Mark Lindsey – mark@linkedfinance.com

Covid 19 – Update on Social Welfare supports for Employees and Employers

  • Social Welfare measures for Employees & the Self Employed
  • Process for Employers for keeping staff on the Payroll
  • The process for Refunds to Employers who engage with the scheme

COVID 19 – Pandemic Unemployment Payment

If you have lost work due to a downturn in economic activity caused by COVID-19 you can apply for the new  COVID 19 – Pandemic Unemployment Payment at this link – https://www.gov.ie/en/service/be74d3-covid-19-pandemic-unemployment-payment/

This new payment quickly delivers income support to the unemployed (be they self-employed or employees) for a 6-week period.

It is designed to provide income security for a period during which you can apply for a full Jobseekers payment (and receive any additional entitlements backdated).

You can apply for the Pandemic Unemployment Payment by filling in a one page application at the link above and returning to PO BOX 12896, Dublin 1. by FREEPOST. You do not need to visit an Intreo Centre to apply.

 

How to Qualify

Both employees and self-employed people can apply for the new COVID-19 Pandemic Unemployment Payment.

You can apply for the payment if you:

  • Are aged between 18 and 66 years AND
  • You have lost employment due to the COVID-19 (Coronavirus) pandemic
  • And it also includes people who have been put on part-time or casual work.
  • Students who have lost employment can also apply.

The COVID-19 Pandemic Unemployment Payment is paid at a flat rate of €203 per week for 6 weeks. It is equivalent to the jobseeker payment rate.

If you are getting another social welfare payment and you have lost your employment, it can be paid in addition to this.

 

Employers – Keeping Staff & Refunds

Revenue has worked closely with Department of Employment Affairs and Social Protection (DEASP) to provide an option for employers to make this payment to their employees through the normal payroll process. The amounts paid to employees under the scheme are not subject to tax, USC or PRSI.

Employers are encouraged to facilitate employees by operating the scheme. The amounts paid to employees and notified to Revenue will then be transferred into the employer’s bank account by Revenue.

This reimbursement will, in general, be made on a ‘next day’ basis. It will ensure a speedy payment process for employees and minimise the hardship for employees who are temporarily laid off. Refunds of income tax or USC that an employee may be entitled to because of being laid off will also be administered by the employer and will be repaid (to the employer) through the scheme.

The scheme can be operated for all employees for whom a payroll submission was made by the employer in the period from 1 February 2020 to 15 March 2020. Where employees have already been laid off and their employer has ceased their employment, they can apply directly to DEASP for the payment.

 

Who does the scheme apply to?

  • Employers who have temporarily laid off staff as a result of the impact on their business of the COVID-19 (Coronavirus) pandemic
  • Employers that keep their staff on payroll and have not ceased the employee(s) with Revenue
  • Employees for whom a payroll submission was made by the employer in the period from 1 February 2020 to 15 March 2020
  • Employers that are unable to make top-up payments over and above the emergency payment of €203 per week.

Making an application for the Refund Scheme

Employers, or their agents, apply to Revenue to operate the scheme by carrying out the following steps:

Log on to ROS myEnquiries and select the category Employer COVID -19 Refund Scheme’.

Read the declaration and press the ‘Submit’ button.

Log on to ROS and in ‘Manage bank accounts’, ‘Manage EFT’, ensure that the bank account details provided are correct.

 

Key features of the scheme

The employer will make the payroll submission to Revenue on or before each pay date.

Employers should contact their payroll software providers for assistance in respect of payroll to be processed under this scheme.

The employer runs the payroll as normal, entering the following details for each relevant employee:

 

PRSI Class set to J9

A pay amount of €0.01 (there must be some pay entered for the payroll to run).

A non-taxable amount of €203. No other payment amounts are made by the employer to the employee and all temporarily laid off employees are granted the €203.

The payroll submission must include pay frequency and period number.

No other payments are made by the employer to the employee for the applicable week(s) and all temporarily laid off employees receive the €203 per week.

Income tax, USC and PRSI are not deducted from the €203 payment.

Any Income Tax and USC refunds that arise as a result of the application of tax credits and rate bands can be repaid by the employer and this amount will also be refunded to the employer.

The employee must confirm to the employer that they have not, and will not, claim a payment from DEASP whilst the employer makes this payment through the payroll.

Employers will be asked to advise employees to make a Jobseeker’s Benefit claim via the MyWelfare.ie online portal (so that the employee(s) can access qualified dependant payments if appropriate).

Based on the information provided in payroll submissions, Revenue will credit €203 per employee per week to the employer’s bank account recorded in ROS.  The credit will include the reference COVID Employer Refund. (The main identifiers include Employer Number Gross Pay of €0.01, J9 PRSI class, Pay Frequency and Employee PPSN, Employment ID).

Revenue will credit the employer bank account for payroll submissions received before 2:00 PM each day.  Depending on the individual bank, the refund should be with the employer on the next banking day.

If the employee(s) resume employment with the employer, or obtains other supports from DEASP, or secures employment elsewhere, the employer will not include the employee(s) concerned in future submissions.

 

Guidance/Information

For general issues relating to the Scheme, employers should contact Revenue’s National Employer Helpdesk via the myEnquiries system, providing details of the query and a direct dial contact number.

Employers should make sure to select ‘Employer’s PAYE’ and then ‘Employer’s PAYE General Enquiry’ when submitting the query through myEnquiries.

 

Lay off procedures

Do I need to pay employees sick pay?

If an employee presents a medical certificate for any reason, including contraction of the virus or self-isolation, you should follow your sick pay policy as normal.

If an employee contracts Coronavirus (COVD-19) or is medically instructed to self-isolate, they will be entitled to received €305 per week from the Department of Social Protection. This payment is up to 2 weeks for self-isolation and for the duration of the illness if contracted.

Can I place employees on a period of lay-off?

A ‘lay-off’ situation can occur when there is an unexpected downturn in the business that is out of the Company’s control. If you have no work for the employee, and/or the Business is under extreme financial pressure, you can place an employee on lay-off.

Lay-off is viewed as being a temporary situation, so employers should be aware that if lay-off lasts for a certain length of time, the employee may be entitled to seek a redundancy payment.

If you are considering placing an employee on lay-off, you need to ensure you have a business justification for doing so. If your decision was ever challenged in the WRC, you will need to show your reasoning.

Can I put some staff on lay off while others work?

In relation to choosing employees for the reduction/short time, the criteria should be reasonable and applied in a fair manner. The last in, first out is deemed as appropriate, or by department based on the tasks that they are completing.

What is the process for placing employees on lay-off?

You must have a lay off clause in the employees’ contract of employment.

Lay Off

You as the employer would need to inform your employees that you are placing them on lay off and issue them with the relevant notification (Form RP9) confirming this.

Employees are not paid during a period of lay off, they can claim Social Welfare during this period. If an employee is on lay off from a business for a period of four weeks, they can request to be made redundant, if they have in excess of 2 years’ service. If this happens, there will be a cost involved for the company.

Short Time

When employees are placed on short time this requires that they be reduced to 50% or less of their normal working hours. When on short time employees may apply for Social Welfare to make up the rest of the week. It is important that the hours do not go above 50% while the period of short time continues.

 

With regards to redundancy claims under both of these systems;

Lay-off and short-time are viewed as being temporary situations, so  you as the employer should be aware that if either the lay-off or short-time working lasts for a certain length of time, the employee may be entitled to seek a redundancy payment.

This occurs when the employee has been laid off or kept on short-time (or a combination of both) for either

  • At least four consecutive weeks or,
  • within a 13-week period, for a series of at least six weeks of which not more than three were consecutive

Within 4 weeks of either of the above situations ceasing, the employee can decide to claim redundancy. The claim must be made on the form RP9. Once the employer receives this form s/he has two options:

  • S/he can accept it and pay the redundancy lump sum thereby accepting that there is a termination of employment; or
  • S/he can give a counter notice within seven days to the employee contesting their claim for redundancy.

Counter Notice

By issuing a counter notice the employer promises that within four weeks the employee will be employed for a period of 13 consecutive weeks.

If this does not happen, the counter notice is invalid and the employee is entitled to a redundancy payment. The employee is entitled to statutory redundancy only. S/he is not entitled to a notice payment, as s/he is the party terminating the employment.

Form RP9 – Lay-off and short time procedures