Redundancy Payments

When you lose your job due to  the closure of a business or a reduction in the number of staff – this is known as redundancy.The Irish Redundancy Payments Acts 1967-2003 sets a  statutory 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.

Your employer may give you  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.

The statutory minimum redundancy payment is a lump-sum payment based on the pay of the employee.
All eligible employees are entitled to:
Two weeks’ statutory redundancy payment for every year of service, regardless of age, plus  One  week’s pay .
(Max pay used in calculation is 600 euro per week)
Pay refers to your current normal weekly pay, before tax and PRSI deductions, that is your gross pay. The statutory redundancy payment is tax-free.

Reckonable and non-reckonable service
All redundancies notified after 10 April 2005 take account of absences from work only over the last three years of service. Any absences outside of the three-year period ending on the date of termination of employment are disregarded.
When calculating the length of your service for redundancy payment purposes, the following periods over the last three years of service only should be taken into account, (the absences listed here are called reckonable absences):

The period you were actually in work
Any period of absence from work due to holidays
Any period of absence from work due to illness (see below for non-reckonable periods of illness)
Any period where you were absent from work by agreement with your employer (typically career break)
Any period of basic and additional maternity leave allowed under the legislation
Any period of basic adoptive/parental/carer’s leave
Any period of lock-out from your employment
Any period where the continuity of your employment is preserved under the Unfair Dismissals Acts.

However, in making the calculation of the length of your service, the following periods over the last 3 years will not be taken into account as service, (these are called non-reckonable absences):

Any period over 52 consecutive weeks where you were off work due to an injury at work
Any period over 26 consecutive weeks where you were off work due to illness
Any period on strike
Any period of lay off from work.

Employer’s insolvency

In the first instance it is up to the employer to pay the statutory redundancy lump sum to all eligible employees. The Social Insurance Fund (SIF) finances the 60% redundancy rebate payment to employers who pay their eligible employees their full statutory redundancy entitlements. However, where the employer is unable to pay or refuses or fails to pay, the Department of Enterprise, Trade and Employment steps in and makes a payment from the SIF.

Where your employment has been terminated due to the insolvency of your employer legislation provides for the payment of certain outstanding entitlements in relation to your pay. Under the Insolvency Payments Scheme these may be paid by the Department out of the Social Insurance Fund.
From 1 January 2005 the maximum earnings taken into account in the calculation of statutory redundancy lump sum payments are only €600 per week (€31,200 per year).

On the date of the termination of employment the employer must pay the redundancy lump sum due to you and give you a “Redundancy Certificate” – section B of form RP50. If your employer has not given you your redundancy lump sum you may apply for this on form RP77 which is available from the Department of Enterprise, Trade and Employment.

If there is a dispute about redundancy you may bring a claim to the Employment Appeals Tribunal. This must be done within one year of your dismissal.

For further information about the Redundancy Payments Scheme contact
National Employment Rights Authority
Information Services
Government Buildings
O’Brien Road
County Carlow

Opening Hours:Mon. to Fri. 9.30am to 5pm
Tel:(059) 917 8990
Locall:1890 80 80 90