The primary legislation in area of Redundancy are the Redundancy Payments Acts, 1967 to 2007 (the “Redundancy Acts”). A “redundancy” situation is defined as occurring when there is a dismissal of an employee by an employer, not related to the employee concerned, and the dismissal results “wholly or mainly” from one of the following situations :
- 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 ; or
- 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 cease or diminish ; or
- 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 ; or
- Where an employer has decided that the work for which 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 ; or
- Where an employer has decided that the work for which the employee has been employed (or had been doing before his dismissal) should henceforth be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.
In addition to the provisions in the legislation the employer will be required to follow certain fair procedures that is, to give at least 2 weeks’ notice and on the date of dismissal pay the redundancy payment. There are also various procedures with regard to selection for redundancy. In this regard, the selection criteria must be in a fair and reasonable manner. As the employer, you are obliged to consider all options before deciding on redundancy. Are there alternatives? You should record the decision making process. The employer needs to set out whether alternative employment is an option for the employee. It is also good practice for the employer to hold meetings and discussions to explore any alternatives and it would be prudent to make a record of these discussions and proposals. If the employer does not comply with the requirements and the employee can evidence he/she was unfairly selected, the employer will be exposed for a claim for unfair dismissal.
Pursuant to Section 14 of Redundancy Acts, a redundancy situation does not arise in circumstances of termination of employment contract due to misconduct. However it is important to remember that this provision does not entitle an employer to create a misconduct situation for the purposes of avoiding payment. The misconduct must be genuine and proper disciplinary procedures followed.
It is also important to note that redundancy should arise from the doing away with the job, not the person.
The Redundancy Payment Act of 1967 – 2014 provides a minimum entitlement to a redundancy payment for employees who have a set period of service with the employer.
The statutory redundancy payment is a lump-sum payment based on the pay of the employee. The employee will be entitled to:
- Two weeks’ pay for every year of service
- One further week’s pay
However the amount of statutory redundancy is subject to a maximum earnings limit of €600 per week.
Derek Walsh, Solicitor at Keating Connolly Sellors, can be contacted at [email protected] or by telephone on +353 (0)61 414 355 or +353 (0)61 414 353.
The material contained in this article is for general information purposes only and does not constitute legal or other professional advice. We advise people to always seek specific expert advice for their individual circumstances.