Redundancy can be a difficult experience for both employers and employees. Understanding the redundancy rules in Ireland is crucial to ensuring a fair and transparent process. This blog post aims to provide a comprehensive overview based on the guidelines from Citizens Information.
What is Redundancy?
Redundancy occurs when an employer needs to reduce their workforce because a job role is no longer required. This can happen due to various reasons such as business closure, restructuring, or technological changes.
Eligibility for Redundancy Payments
To qualify for a statutory redundancy payment, employees must have at least two years of continuous service with their employer. The redundancy must be genuine, meaning the job role must cease to exist.
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Notice Period Requirements
Employers are legally required to give employees notice of redundancy. The notice period is determined by the length of service:
- 1-2 years: 1 week
- 2-5 years: 2 weeks
- 5-10 years: 4 weeks
- 10-15 years: 6 weeks
- 15+ years: 8 weeks
Statutory Redundancy Payment Calculation
Eligible employees are entitled to:
- Two weeks’ pay for each year of service
- An additional one week’s pay
The weekly pay is capped at €600 for the purpose of redundancy calculations.
Collective Redundancies
If an employer plans to make a large number of employees redundant (usually 20 or more) within 30 days, this is considered a collective redundancy. The employer must engage in a consultation process with employee representatives and notify the Minister for Enterprise, Trade and Employment.
Tax Considerations
Statutory redundancy payments are exempt from tax. However, any additional payments made by the employer, known as ex-gratia payments, may be subject to tax, depending on the amount and individual circumstances.
Employee Rights During Redundancy
Employees have several rights during the redundancy process, including:
- Fair selection criteria for redundancy
- Adequate consultation period
- Time off to seek new employment opportunities
- The right to appeal if they believe the redundancy is not genuine
Understanding these rights and rules can help both employers and employees manage the redundancy process more effectively. For more detailed information and personalised advice, consider consulting with a professional advisor or legal expert.
