Redundancy


A redundancy situation generally arises where an employee’s job no longer exists and they are not replaced. A redundancy can arise where one of the following occurs:

An employer ceases to carry on business or to carry on business in the place where you have been employed
An employer’s requirement for employees in your category has ceased or diminished
An employer has decided to carry on the business with fewer or no staff.
An employer has decided the work is to be done in a different manner in future and the employee is not enough qualified or trained to do the work in the required manner
Your employer has decided that your work will in future be done by another person who can do other work as well and you are not sufficiently qualified or trained to do that other work

Not all employees are entitled to the statutory redundancy payment, even where a redundancy situation exists. To be eligible for a redundancy payment under the Redundancy Acts, the employee must satisfy the following requirements:

Be aged over 16 years of age
Be in employment and paying Class A PRSI contributions, which are insurable for all social welfare benefits.
Have worked continuously for the employer for at least 2 years (104 weeks)
Have been working continuously for the employer for more than 2 years if working part-time
The same rules apply to apprentices. Apprentices qualify for redundancy unless let go within one month of completing an apprenticeship.

In deciding whether you have worked continuously for your employer for at least 104 weeks (2 years), the following situations will not break the continuity of your service:

You were on maternity leave, adoptive leave, parental leave or carer’s leave
You were off work through illness, agreed absence, holidays or lay off
You were dismissed due to redundancy before reaching 104 weeks’ service and then taken back by your employer within 26 weeks of that dismissal
You have been re-employed within 4 weeks of dismissal by an associate company of your previous employer
You have been voluntarily transferred to another employer and it is agreed that the continuity of your service will not be broken
You are placed back in your employment under the unfair dismissals legislation
You are on strike or locked out of your employment
There has been a transfer of the business you work for to a new owner

Agency employees are also protected under redundancy legislation. If the employment agency pays the wages, it is responsible for paying the statutory redundancy payment.

Certain part-time workers (such as those in casual employment or in employment of inconsiderable extent) have a right to statutory redundancy. They must still meet the requirement for 2 years’ continuous service. Your solicitor will be able to advise you further in this regard.

Employers must give a written period of notice for redundancy of at least two weeks, the minimum period, to both the employee and to the Department of Enterprise, Trade and Innovation. It is important to note that during this period an employee should be given reasonable time-off to look for other work.

The Statutory Redundancy payment is the minimum payment received by a person who qualifies for a redundancy payment. The amount of the Redundancy payment is determined by the employee’s length of continuous service and weekly earnings. Weekly earnings include gross weekly wage, average regular overtime and benefits-in-kind. Currently, the maximum weekly amount for a statutory redundancy payment is €600.

If an employee is eligible for a Redundancy payment, they are entitled to:

Two weeks pay for each year they have been employed and
A bonus week’s pay

If an employee has worked part of a year, they are entitled to two weeks multiplied by the part of the year they have worked.

Breaks in service may be taken into account when a statutory redundancy payment is being calculated, though any breaks are only relevant for the three years prior to being laid off.

Some employers make provision for redundancy payments above the statutory requirements.

The statutory redundancy payment, or the statutory redundancy part of an enhanced redundancy payment, is tax-free. Any enhanced element of a redundancy payment is liable for tax.

Voluntary redundancy situations arise when an employer requires fewer workers and asks for employees to volunteer for redundancy. The employees who volunteer for redundancy have to satisfy the general conditions attached to qualifying for a redundancy. There must also be a genuine redundancy situation

Although a redundancy situation may exist, you may have grounds for complaint if the manner of your selection for redundancy was unfair.

In selecting a particular employee for redundancy, an employer should apply selection criteria that are reasonable and are applied in a fair manner. You are entitled to bring a claim for unfair dismissal if you consider that you were unfairly selected for redundancy or consider that a genuine redundancy situation did not exist. Examples of these situations might include where the custom and practice in your workplace has been last in, first out and your selection did not follow this procedure. Another example may be where your contract of employment sets out criteria for selection which were not subsequently followed.

Under the unfair dismissals legislation, selection for redundancy based on certain specific grounds is considered unfair. These include redundancy as the result of an employee’s trade union activity, pregnancy or religious or political opinions.
The employment equality legislation also prohibits selection for redundancy that is based on any of the following nine grounds: gender, civil status, family status, age, disability, religious belief, race, sexual orientation or membership of the Traveller community.

If your employer has not paid your redundancy lump sum, you should apply to them for it and if they still refuses to pay it, you can apply to the Department of Social Protection for direct payment from the Social Insurance Fund.

If your employer refuses to pay your redundancy lump sum or if there is a dispute about redundancy you can bring a claim to the Employment Appeals Tribunal.

If you are an employer who is affecting redundancies, then we highly recommend that you contact your Solicitor for the correct advice and guidance.

At Geraghty & Co., Solicitors we would be delighted to advise you on any matter in respect of redundancy or employment law. If you have any query in respect of this please contact us for a Free Consultation either by phone on 091-565258 or email us at enquires@geraghty.ie or use the ‘Contact Us’ section of our website.

Please note that the above information is for general purposes only and does not constitute professional legal advice. If you require specific advice on any legal matter then please contact us by phone on 091-565258 or by email at enquires@geraghty.ie