The crucial wage subsidy scheme aimed at keeping hundreds of thousands of people in jobs has been thrown into doubt after lawyers warned it was unworkable.
Apparent deficiencies in the proposed legislation were pinpointed as the Government raced to get the measures through the Dáil in a bid to protect jobs threatened by the coronavirus pandemic.
The temporary wage subsidy scheme is intended to help employers retain staff on their books for the duration of the crisis by paying a subsidy equal to up to 70pc of an employee's take home pay, up to €410 a week.
Employers are encouraged to top up their employees' wages to maintain them at their current level of earnings.
The scheme is available to employers who have lost a minimum of 25pc of turnover because of the Covid-19 crisis.
But the Law Society's employment and equality law committee raised serious concerns over its operability.
In an urgent letter to Social Protection Minister Regina Doherty, its chairperson Catherine O'Flynn said that, as drafted, the gateway to eligibility to the scheme was "vague and difficult to understand".
The committee warned it was "unlikely" most employers would sign up for it.
Separately, leading employment solicitor Richard Grogan said an employer would have to effectively declare it was insolvent, which could give rise to fraudulent trading issues for limited companies.
He said it was his view employment law specialists and insolvency practitioners would not be advising employers to go into the scheme.
Isme chief executive Neil McDonnell said there were also concerns that, under the proposed legislation, the Revenue Commissioners would publish a list of companies who avail of the scheme.
Some of its members fear this would affect their ability to get credit in future, disadvantage them compared to competitors with larger cash reserves and potentially prevent them from winning contracts after the emergency.
The Revenue moved to dispel some of the concerns.
In a guidance document published last night, it said its priority was ensuring employers could register and receive payments as soon as possible.
"The declaration by the employer is not a declaration of insolvency," it said.
"The declaration is simply a declaration which states that, based on reasonable projections, there will be, as a result of disruption to the business caused or to be caused by the Covid-19 pandemic, a decline of at least 25pc in the future turnover of, or customer orders for, the business for the duration of the pandemic and that as a result the employer cannot pay normal wages and outgoings fully but nonetheless wants to retain its employees on the payroll."
It is still possible for amendments to be made to the scheme before it is signed into law. The Emergency Measures in the Public Interest (Covid-19) Bill was debated in the Dáil yesterday and goes before the Seanad today.
In its letter, the Law Society committee said that, as drafted, one section of the bill "potentially means" the employer needed to be insolvent. It said that if this was the case, it would be hard to see how legally or practically an employer could "top up" the subsidy payment.
The committee advised that the conditions of eligibility should be changed and based on an employer's reasonable belief that, solely as a result of the pandemic, it would need to lay off, place on short-time, or make redundant employees for at least the duration of the emergency.
It said the employer could declare that but for the Covid-19 emergency, the business had no proposals to implement layoffs, short-time or redundancies.
Travel News Premium
John Spollen, the soft spoken president of the Irish Travel Agents Association, describes what has happened since the outbreak of coronavirus as a "Wild West of aviation" as airlines have abandoned their customers and ignored their rights.