Redundancy & Discrimination
Redundancy arises where a job ceases to exist. The reasons for a job ceasing to exist might be due to the financial position of the employer, lack of work, the business closing down or a reorganisation within the business. In order to qualify for a statutory redundancy payment, an employee must have at least two years continuous service with the employer.
The Redundancy Payments Acts 1967-2007 provide a minimum entitlement to a redundancy payment for employees who have a set period of service with the employer. Not all employees are entitled to the statutory redundancy payment, even where a redundancy situation exists. If you do qualify for redundancy there are specific redundancy procedures which employers and employees must follow in order to comply with the legislation.
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 statutory redundancy payment is a lump-sum payment based on the pay of the employee. All eligible employees are entitled to:
Two weeks’ pay for every year of service over the age of 16 and
One further week’s pay
The amount of statutory redundancy is subject to a maximum earnings limit of €600 per week (€31,200 per year).
Pay refers to your current normal weekly pay including average regular overtime and benefits-in-kind, but before tax and PRSI deductions, that is your gross pay.
The statutory redundancy payment is tax-free.