What is a redundancy?

A redundancy has a very broad definition and can arise in the following situations:

• Employer decides to carry on the business with fewer or no employees;
• Employee is not sufficiently trained/qualified to carry out work in a different manner as decided by the employer;
• Employer has ceased/intended to carry on the business for the purpose for which the employee is employed or in the place the employee was employed.
  

What is a collective redundancy?

Collective redundancy is a situation where there are a number of dismissals by way of redundancies within a consecutive 30 days, for example, at least 5 in a business employing more than 20 and less than 50.

The employer must comply with two basic provisions:

• The employer must notify the employees of the proposed redundancies and consult with employees at least 30 days before the Notice of the First Redundancy is given. The employer must also notify the Minister for Enterprise Trade & Employment in writing of the proposals at the earliest opportunity but at least 30 days before the first dismissal takes effect.
• The employer must consult with the employees regarding the possibility of avoiding the proposed redundancies and also the basis upon which it will be decided which particular employees will be made redundant.

How are employees selected for redundancy?

Employees must be fairly selected for redundancy. The selection must be based on objective factors, for example, the skills and experience of the employee. The selection further cannot be based on any discriminatory grounds. It is important to note that the ‘Last in First Out’ rule does not automatically apply when it comes to selecting employees for redundancy.

Am I eligible for redundancy?

In order to be eligible for redundancy, employees must have a minimum of 104 weeks continuous service with the employer, and must also be over the age of sixteen years. ‘Week’ in this regard is held to mean a ‘working week’.

It is also important to note that if the employer offers the employee ‘suitable alternative accommodation’, this offer may disentitle the employee to redundancy. The question of whether the suitable alternative employment is indeed so will depend on the circumstances of each case.

Employers must consider all vacancies within the organisation and whether the employee to be made redundant is suitable for those vacancies. It is imperative that employers are aware that a failure to offer alternative vacancies may lead to a claim for unfair dismissal.

What am I entitled to on redundancy?

The statutory redundancy payment to which an employee is entitled comprises of the following:

• Two weeks pay per year of service plus
• One bonus week.

It should be noted that the gross weekly wage at the date of dismissal is capped at €600. This statutory redundancy payment is given tax free to the employee.

Ex gratia payments are at the discretion of the employer and are taxable in the employee’s hands.

An important point to note is that both the employer and employee must sign a form called RP50 and submit it to the Department of Enterprise Trade & Employment in order to receive payment. This must be done at least two weeks prior to the redundancy taking place.

An employer is entitled to 60% rebate on statutory redundancy payments provided the claim is made within 6 months of the date of dismissal.