When an employee is placed on lay-off there is an obligation on the employer to continue to pay the employee, except in very limited circumstances. The Payment of Wages Act 1991 provides that “an employer shall not make a deduction from the wages of an employee unless –
a) The deduction is required or authorised to be made by virtue of any statute.
b) The deduction is required or authorised to be made by virtue of a term of the employee’s contract of employment
c) In the case of a deduction the employee has given his prior consent in writing to it.”
If an employee’s contract of employment has a specific clause providing for non payment of wages during a period of temporary lay-off then there is no obligation on the employer to pay wages during that period. Therefore there is no right to lay-off without paying that worker unless there is a custom or practice of not paying during lay-off. Such a custom or practice must be reasonable, certain and notorious.
Who do I complain to if I’m not being paid?
If an employee is not being paid during the lay-off period they can make a complaint to the Rights Commissioner Service under the Payment of Wages Act. Some lay-off procedures are being abused by employers as a method of avoiding paying redundancy payments.
Lay-off should only take place where there is a real potential for the person to be brought back to work. When an employee is placed on temporary lay-off, this does not affect the employee’s entitlements to their holiday pay or payment in respect of public holidays.