COVID-19 Level 5: Impact on Employers and Employees

At midnight on 21st October 2020, Ireland was placed at Level 5 of the Government’s Plan for Living with Covid-19 for a period of six weeks.   For employers and employees, the consequences are that all workers must work from home unless providing an essential service for which their physical presence at their usual work location is required.   Only essential retail and essential services remain operational or open to the public.  This has resulted once again, unfortunately, in a significant number of workers being laid off temporarily for the duration of the Level 5 restrictions by their Employers.

It should be noted that lay-off does not equate to termination of the employment relationship and the worker remains an employee.

Pandemic Unemployment Payment (PUP)

Employees laid off due to the Covid-19 emergency may be entitled to the Pandemic Unemployment Payment from the Department of Employment Affairs & Social Protection.  A new payment structure was announced for the PUP in October 2020.  Details of the PUP can be found here.  

Supports for Employers

The Government has also introduced the Employment Wage Subsidy Scheme (EWSS), where employers who temporarily lay-off staff and who are not in a position to continuing paying wages to staff from their own resources are asked to keep their employees on the payroll and may avail of a refund scheme for employers under an arrangement with Revenue. This scheme replaced the earlier “Temporary Wage Subsidy Scheme” introduced at the start of the pandemic.  The basis of the EWSS is set out in the Financial Provisions (Covid-19) (No. 2) Act 2020.  Further detail is set out in Revenue guidelines available here.  

The primary purpose of the EWSS is to ensure, where possible, that employees are retained on the payroll with their Employer rather than being made redundant.  Eligibility is where the business expects 30% reduction in turnover between 1st July and 31st December 2020.  This scheme is administered by Revenue, and businesses must register with Revenue Online Services.  Employers may backdate a claim for eligible employees to 1st July 2020 in certain circumstances.

Although redundancy legislation stipulates that there is an entitlement for an employee to claim redundancy from their employer where they have been placed on layoff/short-time for a particular period, that entitlement does not apply during the Covid 19 Emergency Period.  This is due to the fact that a significant number of employers have had to lay-off workers for long periods due to Covid-19 and if all of those workers claimed redundancy then it would likely mean that many of those Employers would become insolvent.  The Covid 19 Emergency period (for the purpose of the redundancy legislation) is presently defined as enduring until 30th November 2020.  It is anticipated that this period will be further extended.

In light of the unprecedented situation as a result of Covid-19, some employers may unfortunately be fearful that their business may have to cease trading on a permanent basis due to a downturn/reduction in business.   The Government has introduced a significant number of measures in an effort to support affected businesses and these should be considered.   The measures introduced can be viewed on the Department of Business, Enterprise & Innovation website here.  This is a very informative resource and gives details on the supports available including loans, grants and other schemes for businesses of all sizes.

Covid Restrictions Support Scheme (CRSS)

A new Covid Restrictions Support Scheme (CRSS) is one support measure which may be helpful for businesses impacted by Level 5 restrictions.   It applies to companies, self-employed persons and partnerships.   Where a business is either forced to temporarily close, or the business is required to operate at significantly reduced levels, because of the restrictions, the company will qualify for the support.  It allows payments equal to 10% of a business’ average weekly turnover in 2019 up to €20,000 and 5% thereafter, subject to a maximum weekly payment of €5,000, for each week that the business is affected by the Covid restrictions.  The scheme may be accessed through Revenue and guidelines are available here

If, notwithstanding the supports available, a business considers it has no option but to cease trading on a permanent basis, it should be noted that there is no bar on an employer effecting redundancies during the Covid-19 pandemic.  However, the usual best practice guidance as regards redundancies apply.  In general terms the following should be borne in mind:

  • There must be a valid business rationale for any proposed redundancy.
  • The pool of employees who may be at risk of redundancy must be identified.
  • It is the role which is to be made redundant, not the person.  There should be an element of impersonality in the redundancy process
  • Objective selection criteria should be used when selecting persons from the pool who may be at risk for redundancy.
  • Employees whose roles are at risk for redundancy should be given notice of same. 
  • Employers and employees are encouraged to explore any alternative proposals to making a role redundant.
  • Employees should be afforded all entitlements once a final decision is made that the person’s role is redundant.


If you require further information about any of the above information, please contact Emily Sexton, Partner, Comyn Kelleher Tobin.


This is a general guideline only, it is not intended as legal advice.   Specific legal advice should be taken on individual situations as the advice may depend on the particular circumstances of the query.   Given the continually evolving situation around Covid-19 measures and supports, it is strongly recommended to check up to date Government resources and to seek legal advice if necessary.