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12 August 2020
This article discusses the key measures under the new government's July Stimulus Plan (SP) of which employers should be aware, plus various commitments under its Programme for Government (PFG) which could have a significant impact in workplaces.
Announced on 23 July 2020, the SP will provide more than €7 billion in government funding to help boost Ireland's economic recovery in the wake of the COVID-19 crisis. With gross domestic product expected to decline by 10.5% in 2020, the SP intends to build on existing measures implemented to protect and restore the economy since the crisis began in March 2020.
The government also intends to publish a National Economic Plan (NEP) alongside its budget in October 2020 which will include further long-term measures to support the economic recovery.
There are several measures under the SP which could have a major impact on the world of work, the most significant of which are highlighted below.
Wage subsidy and Pandemic Unemployment Payment
On 31 August 2020 the Temporary COVID-19 Wage Subsidy Scheme (TWSS) will end and be replaced by the Employment Wage Subsidy Scheme (EWSS), which is expected to continue until 31 March 2021. Both schemes run in parallel from 1 July 2020 until the TWSS expires.
Under the EWSS, eligible employers (including new firms) may claim a flat-rate weekly subsidy of either €151.50 or €203 (depending on the employee's gross weekly wages) per eligible employee (including seasonal and new employees). To be eligible for the EWSS, employers must be able to demonstrate that their turnover or orders will fall by 30% between 1 July 2020 and 31 December 2020 due to COVID-19. Legislation implementing the EWSS is expected to be enacted shortly and further information on how the EWSS operates in practice is available from Revenue.
The Pandemic Unemployment Payment (PUP) has been extended until 1 April 2021 to provide further emergency income support to unemployed workers. From 17 September 2020 the PUP will be closed to new applicants and there will be a gradual reduction in the payment rates.
Job creation, recruitment and support
The SP sets out a variety of additional funding measures to support businesses, including the following:
The SP also provides for government investment to increase the number of work placements, recruitment subsidies and incentives for employers to take on new hires and apprentices.
The Restart Grant will also be extended to provide additional support (up to €25,000) to SMEs:
In addition to the short-term measures announced under the SP, the PFG was agreed by the newly formed government at the end of June 2020. It includes several commitments which will, if implemented, have a significant impact on the employment landscape. Key areas of focus include the following.
Job creation and recovery measures
The government aims to create 200,000 new jobs by 2025. Measures for short-term job creation are set out in the SP (above), while long-term job creation projects are expected to be detailed in the NEP to be published in October 2020 alongside the budget.
Work-life balance, family support and equality
The PFG has a clear focus on improving work-life balance, with a commitment to bringing forward proposals for a right to disconnect in 2020. A public consultation on remote working was open for submissions until 7 August 2020, and the government intends to provide incentives for private-sector employers to move to home and remote working in 2021. These will include an increase in remote, flexible and hub-working arrangements to promote:
There is also a plan to extend paid parental leave to allow for more time to be taken during a child's first year. The PFG also proposes various changes to equality law, including:
The PFG also includes plans to introduce further employment support for employees with disabilities and review and expand targeted employment schemes to help people with disabilities stay in the workforce. The government intends to double the target for the employment of people with disabilities in the workplace to 6%.
The PFG includes a proposal to establish a Commission on Pensions to examine sustainability and eligibility in relation to the state pension. The commission will prepare a report on the state pension system in 2021. Auto-enrolment is likely to be introduced on a phased basis, based on matching contributions being made by workers and employers plus an additional state top-up on such contributions. The state pension age is likely to remain at 66 and any increase to 67 will be deferred.
The government plans to introduce a Senior Executive Accountability Regime in the financial sector and create a forum in which all sectoral regulators measure regulatory approaches against best practice. It is also anticipated that the use of administrative penalties by regulatory bodies, including the Central Bank, will increase.
Brexit features heavily in the PFG because the absence of a trade deal is likely to place further strain on businesses that are already affected by COVID-19. The government has committed to, among other things, working with all sectors to ensure that they are prepared for all possible outcomes, including a no trade deal. It has also stated that it will work to ensure the effective continued operation of the Common Travel Area and reciprocal rights between both countries going forward.
While more detail is expected on how many of the above measures will be implemented in practice, the proposals to date under the SP and the PFG clearly reflect the new economic reality in the wake of COVID-19. Although many of the initiatives that the PFG proposes could be described as aspirational in an economic crisis, one positive of the pandemic may prove to be the acceleration of the trend of businesses in Ireland embracing more flexible work practices and the digitisation of workplaces.
For further information on this topic please contact Audrey Whyte at Lewis Silkin Ireland by telephone (+353 1566 9876) or email (email@example.com). The Lewis Silkin Ireland website can be accessed at www.lewissilkin.com/en/ireland.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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