The Redundancy Payments Acts, 1967-2007 oblige employers to pay
redundant employees "statutory redundancy entitlements". The amount
is related to the employee's length of service and normal weekly
earnings.
A redundancy situation arises where an employee's job ceases to exist
and the employee is not replaced for such reasons as
rationalisation/reorganisation, the financial state of the organisation
i.e. lack of funding etc.
Who is covered?
An employee between the ages of 16 and 66. Employees who have
reached 66 years of age and whose date of termination is on or after the
8th of May 2007 are now eligible for a redundancy payment under the
Redundancy Payments Act 1967-2007 with 104 weeks (two years)
continuous service
Employees must be in employment that is insurable under
the Social Welfare Acts. Full-time employees must be in
employment that is fully insurable for all benefits under the Social
Welfare Acts. This does not apply to a part time employee.
The Department
of Social and Family Affairs decide the question of insurability
in accordance with the rules and procedures provided for in the Social
Welfare Acts.
Are Employers entitled to rebates?
Employers who pay the statutory redundancy entitlement, give proper
notice of redundancy (at least two weeks) are entitled to a 60%
rebate from the Social Insurance Fund.
The Redundancy Payments Section of the Department processes
applications for these rebates – see Form RP50.
What happens if an employer fails to pay a redundancy lump sum?
Employers are obliged to make redundancy payments in accordance
with the statutory requirements laid down under the Redundancy Payments
Acts. In situations where the employer is unable to pay the
employees their entitlements, the Department of Enterprise, Trade and
Employment pays the full amount direct to the employees from the Social
Insurance Fund (S.I.F.).
The employee fills in Form RP50. The Department later seeks reimbursement
from the employer via its Redundancy Recoveries Section.
How is the lump sum calculated?
Two weeks pay for each year of employment continuous and
reckonable between the ages of 16 and 66 years and in addition, a bonus
week. All excess days should be calculated as a portion of 365 days.
Reckonable service is service EXCLUDING ordinary sick
leave over and above 26 weeks, occupational injury over and above 52
weeks. All Breaks in Service should be within the last three years prior
to the Date of Termination.
Reckonable service also excludes absence from work because
of lay-offs or strikes. However, short-time work is
reckonable. All calculations are subject to the ceiling referred to
above, which stands at €600 per week with respect to Notified
Redundancies from 1st of January 2005 [or €507.90 prior to that date.]
Please note that you can now check a calculation at the online redundancy calculator.
Employment Appeals Tribunal
Disputes concerning redundancy payments can be submitted to the Employment
Appeals Tribunal which has the advantage of providing a speedy,
fair, inexpensive and informal means for individuals to seek
remedies for alleged infringements of their statutory redundancy rights.
The Tribunal also deals with disputes under such other labour law areas
as the Minimum Notice and Terms of Employment Acts, 1973 to 2001.
These cover the right of workers to a minimum period of notice
before dismissal, provided they are in continuous service with the
same employer for at least 13 weeks and are normally expected
to work at least 8 hours per week.
This article provides general information and is NOT a legal
interpretation of any matter and should not be seen as such. For
professional or legal advice you should consult a suitably qualified
person.
The article should be used as an introduction to the Department of
Enterprise, Trade and Employment's more detailed "Guide to the Redundancy Payments Scheme"
Visit
the Employment
Resource Bureau for useful information on human resource management
for your community organisation.
