Redundancy
Summery
Where you lose your job due to circumstances such as the closure of the business or a reduction in the number of staff this is known as REDUNDANCY.
Under the Redundancy Payments Scheme all eligible employees are entitled to a statutory redundancy lump sum payment on being made redundant. A redundancy situation arises in general where an employee's job no longer exists and he/she is not replaced. An employee is entitled to two weeks pay for every year of service, with a bonus week added on, subject to the prevailing maximum ceiling on gross weekly pay (€600 with respect to redundancies notified/declared on or after 1st January, 2005 - €507.90 before that date).
The Department of Enterprise, Trade and Employment, which administers the Scheme, will then pay the employer a 60% rebate. Where the employer is unable or unwilling to pay the lump sum, the Department steps in and pays the amount from the Social Insurance Fund (SIF).
However, you and your employer may agree a redundancy payment above the statutory minimum, and in such circumstances, employees who have not reached the statutory minimum period of service may also receive a payment. For example, statutory redundancy only applies to employees with two years' service. However, an employer might agree to pay a lump sum to employees with less than two years' service. This payment arises through agreement and not through a statutory entitlement. As so often in employment law, the legislation is concerned with ensuring minimum rights, while allowing the parties to agree more substantial rights.
The requirements for being entitled to a redundancy are:
- You must have at least two years continuous service (104 weeks).
- You must be in employment which is insurable under the Social Welfare Acts. If you are a full-time employee you must be in employment which is fully insurable for all benefits under the Social Welfare Acts; this does not apply if you are a part-time employee. The question of insurability is decided by the Department of Social and Family Affairs in accordance with the rules and appeals procedures provided for in the Social Welfare Acts. An employee who wishes to appeal such a decision is advised to contact Scope Section of that Department.
- You must be between the age of 16 and Old Age Pension age, which at present is 66 years of age except for employees whose Date of Termination is on or after 8th May 2007 there is no upper age cap.
- You must have been made redundant as a result of a genuine redundancy situation - in general this means that the job no longer exists and the person is not replaced. The emphasis is on the job and not the person, in contrast, for example, to a situation where a person is dismissed for alleged misconduct or where a person voluntarily resigns.
Redundancy is a broad and complicated topic so if you have any queries please contact your local Congress Resource Centre