CURRENT LEGAL ARTICLES

 EMPLOYMENT REDUNDANCY LAW

Do you know your legal responsibilities?

An employer doesn’t want to make people redundant, but it is essential to fully understand your legal rights and responsibilities when redundancy is unavoidable. 

Redundancy is not something any employer wants to face. However, it may be inevitable in these uncertain times. In addition, redundancies will cause your employees to worry about what it means for their future career prospects. So both stakeholders need to know their legal obligation under the employment redundancy Act.

What is employment redundancy?

“Redundancy” occurs when an employee’s position no longer exists and the dismissal results “wholly or mainly”. The law of redundancy deals through “The Redundancy Payments Acts, 1967 to 2007 (the “Redundancy Acts”). The said Act also described the following situation when defining redundancy.

“ (a) Where an employer has ceased or intends to cease, to carry on the business for the purposes for which the employee was employed by him, or has ceased or intends to cease to carry on that business in the place where the employee was so employed

(b) Where the requirements of that business for an employee to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to stop or reduce.

(c) Where the employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employers or otherwise.

(d) Where an employer has decided that the work the employee has been employed (or had been doing before his dismissal) should henceforth be done in a different manner for which the employee is not sufficiently qualified or trained.

(e) Where an employer has decided that the work for which the employee has been employed (or had been doing before his dismissal) should continue henceforth.”

What is the eligibility for a redundancy payment?

The employee’s entitlement to redundancy pay follows from Section 7 of the Redundancy Payments Act 1967, which states:

An employee, if she/he is dismissed by the employer due to redundancy or temporarily suspended, is entitled under this Act to the payment of money, which is known and is referred to in this Act as “Redundancy pay”.  For the eligibility for redundancy payment following are some specific conditions which should be fulfilled.

· The employee must be over 16 years of age.

· The employee must have been continuously employed for 104 weeks.

·  The employee must have been dismissed within the statutory definition of redundancy.

What is redundancy notice and procedure?

Notice:

A redundancy situation does not reduce or restrict any statutory or other employment rights that the employee may have. Employees are still entitled to their contract notice or the minimum notice period set out in the Minimum Notice and Terms of Employment Acts 1973 – 2001. These minimum notice periods apply if there exists no termination clause in the employee’s employment contract or if the contract is concluded notification is below the legal Minimum. The relevant notice periods are as follows;

· 13 weeks to 2 years of service ——— 1 week.

· 2 to 5 years of operation —————- 2 weeks.

· 5 to 10 years of service —————— 4 weeks.

· 10 to 15 years of service ————— 6 weeks.

· 15 or more years of service ———– 8 weeks.

These are only minimum notice periods. During the notice period, it is essential to remember that the employee is entitled to enjoy all facilities he wanted before the notice. 

PROCEDURE:

An employer who proposes to terminate an employee must give that employee statutory notice of termination because of redundancy. An employer should pay the redundancy lump sum to his employee when his career ends. For example, this could be the final day of his notice period or employer pay on the next day.

If the employer pays the redundancy lump sum, they do not have to submit an online application form (previously called the RP50 form). However, the employer should get proof that he paid the employee’s lump sum and also give you a copy of the evidence of payment. An employer should also give employees a written statement describing how any amount has been worked out.

What happens when an employer fails to pay redundancy?

If an employer has not paid your redundancy lump sum, you should apply to your employer for it using form RP77. If your employer cannot pay or they are insolvent, you can apply to get payment from the Government under the Social Insurance Fund.

When it’s time for redundancy?

To meet the requirements of redundancy, 104 weeks of continuous service with a company is required for a statutory redundancy payment. In addition, a qualifying employee is entitled to get redundancy remedies. The employees, who don’t fulfil the requirements, deal by their agreement.

What remedies are available for employees?

If you are eligible for “Redundancy pay”, you are entitled to:

· Two weeks’ pay for each year of service

· The equivalent of one week’s average weekly remuneration.

The maximum weekly amount used to calculate redundancy pay is €600 per week or (€31,200 per year), even if your salary is higher per week.