Redundancy

Redundancy- Employment Law Solicitors Dublin

Redundancy in Ireland is governed by the Redundancy Payments Acts 1967-2012. It is not open to an employer simply to decide to make a person redundant; a redundancy situation must exist within the business. A redundancy situation may occur for a variety of reasons; but often it occurs for the following reasons:

There is a structural change required in the business

The business can no longer financially sustain the number of employees that it currently employs.

Particular work is no longer required.

As stated above it is not open to an employer to simply decide that an employee is to be made redundant There must be a structural change required within the organisation which requires a reduction in the number of employees, or a reduction of a particular class of employee within the business. If such structural change is not required it leaves a question mark over whether or not a genuine redundancy situation exists within the business.

If an employee's contract of employment is terminated by reasons other than those stated above, then and in that event, the termination of the contract cannot be considered a redundancy situation and the termination of their contract of employment by their employer is simply a dismissal; and is therefore governed by the Unfair Dismissals Acts 1977-2007.

Where an employee has been fairly selected for redundancy they are entitled to a statutory minimum of two week's pay for every year of service, plus one extra week's pay. For example and employee who has worked for five years for a business is entitled to 2 week's pay multiplied by five coming to ten week's pay plus one extra week's pay coming to a statutory redundancy payment due to them of 11 weeks remuneration.

For an employee to be entitled to a redundancy lump sum they will need to meet the following requirements:

They Must have at least two years continuous service (104 weeks) working for the business for which they are employed.

The employee must be in employment which is insurable under the Social Welfare Acts.

The employee must be between the age of 16 and 66 years of age.

There must be a genuine redundancy situation as per the Redundancy Payments Acts.

It is hugely important for employers to ensure that the redundancy selection process is carried out in a fair manner. An employer will need to develop a redundancy selection procedure based on the business needs. It should be remembered by an employer that while a genuine redundancy will be deemed to be a fair termination of an employee's contact of employment, the burden of proving that there was a redundancy situation and that the person or persons selected for redundancy were chosen using fair redundancy selection procedures rest with the employer. If an employer attempts to make an employee redundant in circumstances where they cannot prove that there was a redundancy situation or where they cannot not show objective reasons based on business needs for making a particular persona redundant then they may find that they have left themselves open to a claims for unfair dismissal.

Where an employer refuses to pay an employee's redundancy monies or claims they cannot afford to pay an employee's redundancy monies then it is open to the employee to pursue their employer for these monies. In circumstance where an employer confirms that they cannot afford to pay their employee redundancy monies they may be able to obtain the entitlement through a fund set up by the government known as the Social Fund.

Where there is an issue between an employer and an employee in relation to redundancy it is open to the employee to have the issue determined by the Workplace Relations Commission.

If you would like further information on redundancy whether you're an employer or an employee why not contact us today by phone on 01-679 3539 or via email on info@pposullivan.ie to arrange a consultation.