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Employment lawyers critical of Govt wage subsidy scheme

Employment lawyers have strongly criticised the Government’s Temporary Wage Subsidy Scheme which is being debated in the Dáil today.

In a letter to the Minister for Employment Affairs and Social Protection Regina Doherty marked “Urgent”, the Chairperson of the Employment and Equality Law Committee of the Law Society Catherine O’Flynn says that flaws in the Emergency Measures in the Public Interest (Covid-19) Bill 2020 undermine its “fundamental operability”. 

She tells the Minister: “Our concern is that as currently drafted, it is unlikely most employers would avail of the provision and thus the stated aim of the legislation would be stymied”.

Ms O’Flynn makes a number of recommendations to improve the effectiveness of the proposed legislation.

She says that eligibility for the Temporary Wage Subsidy Scheme should not be linked to “complex concepts such as ‘turnover’”, adding that this concept is broad, difficult to define, and could include both domestic and non-domestic turnover.

She notes that it also introduces uncertainty around the appropriate comparison period.

In addition, she cautions that eligibility should not be conditional on “an inability to pay emoluments” – on the grounds that as currently drafted “this gateway to eligibility is vague and difficult to understand”.

She states: “It potentially means that the employer needs to be insolvent and if this is the case, it is hard to see how legally or practically an employer could “top up” the TWSP, as is the Government’s stated desire (this is also problematic where the Revenue intends to publish the names of those employers who avail of the TWSP which is a matter we would also respectfully request be reconsidered in the interests of confidentiality).”

Instead the Committee recommends that eligibility should be based on the following conditions:

  • “a. the employer’s reasonable belief that solely as a result of the economic disruption caused by the Covid-19 pandemic and not otherwise, that it will need to do one of the following in respect of its employees:
  • i. To lay off some or all of its employees for at least the duration of the emergency (to 30 June);
  • ii. or to place some or all of its employees on short-time for at least the duration of the emergency (to 30 June); or
  • iii. terminate the employment of some or all employees by reason of redundancy; and
  • b. that the employer can declare that but for the Covid-19 emergency, the business had no proposals to implement layoffs, short-time or redundancies in the period to 30 June; and
  • c. that the employer has a reasonable belief that it will retain the employees in employment when the Covid-19 emergency measures as they relate to the cessation of commercial activity and free movement of people, cease to have effect (or some other appropriate time bound limitation to that effect.)”

She says that while the Committee has a number of other observations, they do not go to the “fundamental operability” of the Bill in the same way.

She concludes by seeking an urgent amendment to the bill in line with the Committee’s recommendations – and stresses that the Committee is offering the proposed amendments “in a constructive and non-partisan fashion”.

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