This "Brief Guide" gives information regarding individual and collective redundancy - including compulsory and voluntary redundancy - in the Republic of Ireland. This document can be downloaded at http://www.collierbroderick.ie/Services/HR%20Support/Redundancy.asp

1. Brief Guide to Redundancies
(this is a brief guide only and should not be considered as a comprehensive guide to redundancies)
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2. 1.
Prepared by
CollierBroderick Management Consultants
Tel: +353 1 8666426
Fax: +353 1 8666457
E-mail: enquiries@collierbroderick.ie
Web: www.collierbroderick.ie
Disclaimer
Whilst every care has been taken by CollierBroderick Management Consultants to ensure that the information contained
in this guide is accurate and up-to-date, as the guide is for information purposes, the contents of these pages should not
be relied upon as a substitute for your own independent HR or legal advice. We recommend that you always consult a
suitably qualified HR or legal professional on any specific matter before relying on any information in this guide.
No responsibility or liability is accepted by or on behalf of CollierBroderick Management Consultants or anyone
associated with its production for any errors or omissions in the guide, nor for any use the information may be put to.
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3. Redundancy Information Sheet
Relevant Legislation
- Redundancy Payment Act, 1967-2007 - Individual Redundancy
- Protection of Employment Act, 1977 - Collective Redundancy
- Employees (Provision of Information and Consultation) Act, 2006 - more than 50 employees
Legitimate Reasons for Redundancy
A redundancy situation occurs where there is a dismissal of an employee by an employer (not due to any act
of the employee) and the dismissal results “wholly or mainly” from one of the following situations:
1. Where an employer has ceased, or intends to cease, to carry on the business, or where the employer
has ceased or intends to cease to carry on that business in the place where the employee was
employed i.e. closure of business or moving it to another location.
2. 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 has / is expected to ceased or diminish i.e. no longer a requirement
for that employee.
3. Where the employer has decided to carry on business with fewer or no employees whether by
requiring the work for which the employee has been employed to be done by other employers or
otherwise i.e. a reorganisation with fewer staff / outsourcing.
4. Where an employer has decided that the work for which the employee has been employed should
from now on be done in a different manner for which the employee is not sufficiently qualified or
trained i.e. a reorganisation with employee not sufficiently trained and training would cost too much.
5. Where an employer has decided that the work for which the employee has been employed should
from now on be done by a person who is also capable of doing other work for which the employee is
not sufficiently qualified or trained i.e. job enlargement so that employee would have to do current job
plus more and is not sufficiently trained and training would cost too much.
Collective Redundancies
Collective redundancies arise where, during any period of 30 consecutive days, the employees being made
redundant is:
• 5 employees where 21-49 are employed
• 10 employees where 50-99 are employed
• 10% of the employees where 100-299 are employed
• 30 employees where 300 or more are employed
In such a situation, under the Protection of Employment Act, 1977 the employer is obliged to enter into
consultations with employee representatives “with a view to reaching agreement”. . These consultations
must take place at the earliest opportunity and at least 30 days before the first dismissal. The aim of the
consultation is to consider whether there are any alternatives to the redundancies. These talks must include
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4. the possibility of avoiding the proposed redundancies (or reducing the number effected by them) as well as
discussion as to how it will be decided who will be made redundant.
Case law from the EU has meant that the consultation process must have concluded before any redundancy
notices can issue to the employees i.e. if an employer chooses to announce the number of employees who
are to be made redundant and only then commences consultations with the Union / employee
representatives, it may well be in breach of consultation obligations under the 1977 act.
Under the Protection of Employment (Exceptional Collective Redundancies and Related Matters) Act 2007 a
Redundancy Panel is being set up by the Department of Enterprise, Trade and Employment in accordance
with the partnership agreement Towards 2016. The Panel will deal with collective redundancies to ensure
that they are genuine redundancies as opposed to situations where workers are replaced by new workers
doing the same job for lower wages. In addition, under Section 12 of the Protection of Employment Act,
1977, the employer must notify the Minister for Enterprise, Trade and Employment at the earliest opportunity
– but not later than 30 days prior to the first dismissal – of a redundancy situation.
When an employer is consulting their employees as required by the Act, the employer must supply the
employee’s representatives with all relevant information relating to the proposed redundancy. This includes
(but is not limited to):
(a) The reason for the proposed redundancies,
(b) The number and descriptions or categories of employees whom it is proposed to make
redundant,
(c) The number of employees and description of categories, normally employed,
(d) The period during which it is proposed to affect the proposed redundancies,
(e) The criteria proposed for the selection of the workers to be made redundant,
(f) The method of calculating any redundancy payments other than those methods set out in the
Redundancy Payment Acts, 1967-2003.
Note:
This Protection of Employment Act, 1977 is separate piece of legislation from the Redundancy Payments
Acts 1967–2007. Unlike the Redundancy Payment Act, 1967-2003, the Protection of Employment Act, 1977
applies to all employees with a contract of service regardless of the length of time they are employed or
the hours they work.
Informing the Minister
The employer is also obliged to inform the Minister for Enterprise, Trade and Employment in writing of the
proposed redundancies at least 30 days before the occurrence of the first redundancy, and to provide
the information outlined above.
In a separate piece of legislation, The Employees (Provision of Information and Consultation) Act 2006
requires employers to consult with employees on substantial changes in the workplace, including proposals
for collective redundancies. From 23 March 2008 the Act applies to employers of 50 people or more.
Individual Redundancies (Non-Collective Redundancy Situation)
Under the Redundancy Payment Acts 1967-2007, the employer is required to give a minimum of 2 weeks’
notice (which cannot be paid in lieu) of termination of employment to those who are entitled to redundancy
payments. Notwithstanding this, long-serving employees will have longer notice periods as dictated by the
Minimum Notice and Terms of Employment Act, 1973, (as shown in the table below) and / or notice specified
in the contract of employment (whichever is the greater).
The employer is required act “reasonably”. Thus, in order to be reasonable, the employer must hold some
form of hearing with the individual employee.
Notice from the employer
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5. Employees are entitled to a minimum of two weeks' notice of redundancy. This notice period goes up
depending on the period of service.
Period of service Notice required
Between 2-5 years 2 weeks
Between 5-10 years 4 weeks
Between 10-15 years 6 weeks
Over 15 years 8 weeks
Notification Process
No matter what type of redundancy, the employer must give the employee notice of dismissal for
redundancy. He/she can do so by giving Part A (Notification of Redundancy) of Form RP50 to the employee.
Voluntary Redundancy
Voluntary redundancy occurs when an employer, faced with a situation where he requires a smaller work
force, asks for volunteers for redundancy. This should occur as soon as possible. The people who then
volunteer for redundancy are, if they fulfil the normal conditions, eligible for statutory redundancy. Of course,
there must be a genuine redundancy situation in the first place.
Selection for Redundancy
Although “redundancy” is an absolute defence against unfair dismissal, if the employee can show that there
was technically no case of redundancy under the Redundancy Payments Acts, 1967-2003 or that he/she
was unfairly selected for redundancy, he/she can claim unfair dismissal. Once an employee establishes a
prima facia case, the onus is on the employer to prove that a genuine redundancy situation existed and that
the employee was not unfairly selected for redundancy.
Selection issues arise where the employee is employed in similar employment to one or more other
employees with the same employer.
Therefore, those who are employed in “stand alone” position – such as management – normally find it very
difficult to argue that they were unfairly selected for redundancy.
A redundancy will be deemed unfair for the purposes of the Unfair Dismissals Acts if either of the following
selection criteria are broken:
(a) The selection of the employee resulted wholly or mainly from:
1. Membership / Trade union activity
2. Religious / Political opinions of the employee
3. Civil or criminal proceedings against the employers being taken by the employee
4. Race
5. Sexual Orientation
6. Age
7. Membership of the travelling community
8. Pregnancy
9. Gender
10. Family Status
11. Marital Status
(b) The employee was selected for redundancy counter to an agreed procedure (between employer
and union for example) and there was no special reasons justifying a departure from that
procedure.
Where an employee claims unfair selection for redundancy, an employer must be able to objectively justify
the criteria chosen and the rating under each criteria of the employee selected.
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6. In the absence of specifically agreed procedures, where there are two or more employees engaged in similar
employment, the employer is obliged to adopt some sort of objective criteria for differentiating between one
employee and another. Criteria could include, for example, qualifications, skills, experience, timekeeping,
attendance record, performance on the job, relevant experience, etc.
Otherwise, failure to do so may render the dismissal unfair. All things being equal, and with no objective
criteria to select between one employee and another, an employer will be expected to resort to the “last-in-
first-out” (LIFO) rule.
For example, in the case of Dawson v Eir Imports Limited where there was no employer / union
procedures and a LIFO procedure was not followed, the EAT found that the company was right in comparing
the performance of all similar staff [provided that the poor performance of the individual was addressed with
the employee].
Redundancy Payment
All earnings in excess of €600 per week are disregarded in making the statutory redundancy payments. This
means that in calculating a week’s pay, if an employee earns €600 or less gross per week then his actual
weekly remuneration is used in formulating the amount due. The formula for making the payment is as
follows:
- 2 weeks pay for each year of continuous employment over the age of 16 years, plus
- An additional 1 week’s normal earnings.
The final year of service is calculated on a pro-rata basis.
The employer may pay an employee monies over and above the statutory minimum (ex-gratia payment),
although there is no legal compulsion to do so. However, if custom and practice means that the employer
has previously paid an ex-gratia payment when making staff redundant, it will most likely prove difficult to
persuade employees to accept anything less than previously paid, and it may be difficult to defend.
The redundancy calculator on the Department of Enterprise, Trade and Employment website can be used to
help calculate statutory redundancy entitlements.
Conditions Necessary to Qualify for Redundancy Payment
The Redundancy Payments Acts 1967-2007 provide a minimum entitlement to a redundancy payment for
employees who have a set period of service with the employer. Not all employees are entitled to this
statutory redundancy payment, even where a redundancy situation exists.
To be eligible for a redundancy payment under the Acts, employees must satisfy the following requirements:
• Be aged 16 or over
• Be in employment that is insurable under the Social Welfare Acts. Full-time employees must be
paying Class A PRSI. (This insurability requirement does not apply to part-time workers - see
below.)
• Must have worked continuously for the employer for at least 104 weeks (2 years)
Continuous employment
In deciding whether an employee has worked continuously for the employer for at least 104 weeks, the
following situations will not break the continuity of service:
• Maternity leave, adoptive leave, parental leave or carer's leave
• Off work through illness, agreed absence, holidays or lay off
• Dismissed due to redundancy before reaching 104 weeks' service and then taken back by the
employer within 26 weeks of that dismissal
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7. • Been re-employed within 4 weeks of dismissal by an associate company of your previous employer
• Been voluntarily transferred to another employer and it is agreed that the continuity of service will not
be broken
• Placed back in your employment under the unfair dismissals legislation
• On strike or locked out of your employment
• There has been a transfer of the business and the employee works for to a new owner
The same rules apply for apprenticeships and they may qualify for redundancy payment unless they are
dismissed within one month after the end of your apprenticeship.
Agency employees are also protected under redundancy legislation. If the employment agency pays the
wages, it is responsible for paying the statutory redundancy payment.
Part-time workers
The Redundancy Payments Act 2003 amended the insurability requirements for redundancy to ensure the
rights of part-time workers to statutory redundancy. This amendment brings them into line with the Protection
of Employees (Part-Time Work) Act 2001 which provides that part-time employees cannot be treated in a
less favourable manner than comparable full-time employees in relation to conditions of employment.
It means that the right of certain part-time workers (such as those in casual employment or in employment of
inconsiderable extent) to statutory redundancy is now recognised. They must still meet the requirement for 2
years' continuous service as described above.
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8. For
Redundancy Advice & Support
Outplacement or Executive Services for Redundant Personnel
Contact
Helena Broderick
Managing Consultant
Tel: +353 1 8666426
E-mail: hbroderick@collierbroderick.ie
Services are available nationwide through our team of experienced HR practitioners
and employment law consultants
Web: www.collierbroderick.ie
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