Redundancy

Redundancy payments compensate a former employee whose position has become redundant for loss of employment and benefits built up in employment. The Legislation covering redundancy also provides for certain lay off and short-time situations.

To come within the scope of the Redundancy Payments Acts, an employee must: –
➢ work or have worked under a contract of service or apprenticeship, persons working under a contract for service (independent contractors) are not covered by the Act.
➢ Agency workers; the employer being the person who is liable to pay the wages of the individual concerned;
➢ Be over 16 years of age and in employment that is insurable for all benefits under the Social Welfare (Consolidation) Act 2005;
➢ Have been in such employment in the period of that four-year ending on the date of termination;
➢ Have been continuously employed for 104 weeks, being the ‘requisite period’ (after attaining the age of 16 years)

Continuous Employment for redundancy purposes
Employment is presumed to be continuous unless proved otherwise. Employment is continuous unless it is terminated by:
➢ Dismissal (not including an unfair dismissal under the unfair dismissals legislation for which redress was made);
➢ Voluntary resignation

Continuity of employment is not broken by:
➢ An employee voluntarily transferring from one employer to another and both employers and the employee agreeing that all the services will be regarded as continuous;
➢ Periods of absence due to sickness or injury;
➢ Lay off, holidays, or any other absence authorised by the employer;
➢ Service in the Reserve Defence Forces;
➢ Absence from work because of a lockout by the employer or for participation in a strike;
➢ Dismissal due to redundancy before attaining 104 week’s continuous service and resumption of employment with the same employer within 26 weeks of dismissal;
➢ Leave under the Maternity Protection, Adoptive Leave, Carer’s Leave or Parental Leave Acts;
➢ Reinstatement or re-engagement under the Unfair Dismissals Acts

Reckonable Service to calculate redundancy payments
An employee’s reckonable service must be computed to calculate the redundancy lump sum. It includes a week falling within a period of continuous employment during any part of which an employee is: –
➢ At work, or
➢ Absent from work because of sickness, lay off (see below) holidays, or with the employer’s permission;
➢ On leave or absent under the maternity protection, adoptive leave, parental leave (which includes force majeure) or carer’s leave
➢ Absent from work because of a lockout by the employer;
➢ Periods of service where continuity is preserved in any case of redress by way of reinstatement or re-engagement under the Unfair Dismissals Acts

Reckonable service excludes absences during the three-year period, ending with the date of termination of employment;
➢ In excess of 52 consecutive weeks due to an occupational accident or disease as defined by the Social Welfare (Occupational Injuries) Act 1966;
➢ In excess of 26 consecutive weeks because of any other illness, including injury;
➢ Due to lay off;
➢ Due to a strike in the business or industry in which the employee is employed

Apprentices and redundancy
If an apprentice is dismissed within six months after the commencement of the apprenticeship or within one month following completion of the apprenticeship, he or she is not entitled to a redundancy payment. However, if he or she is dismissed during the apprenticeship, he or she is so entitled provided the service and other requirements have been fulfilled. Employers should ensure that the requisite notice expires during the one-month period after the completion of the apprenticeship, otherwise the former apprentice will be entitled to redundancy. ‘Apprentice’, within the meaning of these Acts is an apprentice employed under a contract of apprenticeship.

Definition of Redundancy
An employee is dismissed by reason of redundancy if the dismissal is wholly or mainly due to any of the following circumstances having occurred or being expected to occur:
➢ The employer has ceased or intends to cease, to carry out the business for the purposes of which the employee was employed, or had ceased or intends to cease doing business in the place where the employee was employed; or
➢ The requirements of that business for the employee to carry out work of a particular kind in the place where he or she was so employed has ceased, diminished or is expected to do so; or
➢ The employer has decided to carry out the business with fewer or no employees, whether by requiring the work for which the employee had been employed to be done by other employees or in some other manner; or
➢ The employer has decided that the work by the employee should be done in a different manner for which the employee is not sufficiently qualified or trained; or
➢ The employer has decided that the work for which the employee had been employed should henceforward be done by a person who is also capable of doing other work, for which the employee is not sufficiently qualified or trained

In determining whether an employer has decided to carry out a business with fewer or no employees, account is not taken of certain members of the employer’s family.