Ireland’s Redundancy Act protects workers and employers who have lost their jobs for business reasons. This guide covers dismissal law, key aspects, employee and employer rights and obligations, dismissal procedures, payouts, and appeals. Let’s dive right into it.
Key Aspects of Redundancy Law in Ireland
Types of Redundancy
There are two main types of redundancy in Ireland:
- Compulsory Redundancy: This occurs when an employer has no choice but to make an employee redundant due to financial constraints, restructuring, or a decline in business.
- Voluntary Redundancy: In this case, an employer offers employees the option to leave their job in exchange for a redundancy package.
Employee Rights and Obligations
Employees have the right to:
- Be consulted about the redundancy.
- Be informed of the selection criteria used.
- Be offered alternative employment, if available.
- Receive a statutory redundancy payment and notice period if eligible.
Employees also have an obligation to:
- Act in good faith during the redundancy process.
- Consider alternative employment offered by the employer.
Employer Rights and Obligations
Employers have the right to:
- Make employees redundant if there is a genuine need.
- Set selection criteria for redundancy.
Employers also have an obligation to:
- Consult with employees during the redundancy process.
- Apply the selection criteria fairly and objectively.
- Offer alternative employment, if available.
- Provide statutory redundancy payment and notice period, if applicable.
The Redundancy Process
Step 1: Consultation
Employers must consult with workers and their representatives about possible dismissal, its reasons, and possible alternatives. Consultations should be meaningful and carried out as soon as possible.
Step 2: Selection Criteria
The employer should establish fair and objective criteria for selecting employees for redundancy. These criteria can include factors such as length of service, performance, and skills.
Step 3: Alternative Employment
Employers should check to see if there are suitable alternative employment opportunities for employees within their organisation. If such opportunities exist, employers should provide them to their employees.
Step 4: Notice Period
Employees are entitled to a minimum notice period before their employment is terminated due to redundancy. The length of this notice period depends on the employee’s length of service.
Calculating Statutory Redundancy Payments
Statutory redundancy payments are calculated based on the employee’s length of service, age, and weekly pay. The formula for calculating the payment is:
- 0.5 week’s pay for each year of service under the age of 22
- 1 week’s pay for each year of service between the ages of 22 and 40
- 1.5 week’s pay for each year of service over the age of 41
A maximum limit on the weekly pay can be considered for this calculation, which is currently set at €600.
Sometimes, employers may offer additional coverage as part of a voluntary retirement package. This is at the employer’s discretion and may vary depending on the company’s financial situation and collective bargaining agreements.
Appealing a Redundancy Decision
Grounds for Appeal
Employees may appeal a redundancy decision if they believe that:
- The redundancy was not genuine (e.g., the employer has no legitimate reason to make the employee redundant).
- The selection criteria were applied unfairly or inconsistently.
- The employer failed to consult with the employee or their representatives.
- The employer did not consider or offer suitable alternative employment.
The Appeals Process
Employees can appeal to the Workplace Relations Commission (WRC) within six months of the redundancy. The WRC will then assess the case and may facilitate mediation between the parties or refer the case to the Labour Court for a hearing.
Understanding Ireland’s redundancy laws is essential for both employees and employers. By following the correct process and respecting the rights and responsibilities of everyone involved, the termination process will be as smooth and fair as possible. It is essential to seek professional advice if you need clarification on your right to withdraw.
Redundancy is terminating an employee’s contract due to business needs, such as financial constraints, restructuring, or declining business.
Employees who have worked continuously for at least two years are entitled to statutory retirement benefits. However, some exceptions apply. Non-regular workers employed in family businesses and certain family members.
Yes, you can appeal a redundancy decision if you believe it was not genuine, the selection criteria were applied unfairly, the employer failed to consult with you, or did not consider or offer suitable alternative employment.
You must lodge an appeal with the Workplace Relations Commission within six months of the redundancy.
Employees may be terminated for maternity or sick leave, but not based on their vacation status. Terminations must be truthful, and selection criteria must be fair and objective.