Redundancy is a situation where an employer has decided that it doesn’t require the same number or configuration of employees.  This could mean they have decided to carry on the work of the business with fewer or no employees, to close down a particular unit or operation, reorganise the way work is done resulting in fewer employees being required.  It could also mean that employees with different skills are required instead.

Redundancies often arise where a company or an employer is in financial difficulty. However, this is not always the case, and it is possible (and common) for an employer to have redundancies as a result of a re-organisation.

Redundancies must be based on objective and impersonal criteria

Redundancy is specified as a fair reason to terminate someone’s employment under the Unfair Dismissals Act. However, it is necessary for the employer to show that a legitimate redundancy situation exists. It is also important that an employer can demonstrate that a fair process was employed when selecting which employees are to be made redundant.

Where some but not all employees are to be made redundant, the employer must be able to show that its selection of the employees is not based on personal criteria. It is best practice for an employer to engage with employees in a consultation process prior to making any decision about redundancy. Redundancy should be a last resort for an employer and alternatives to redundancy should be explored with the employee.

Collective Redundancies

Collective redundancy is the making redundant of a minimum number of employees, that minimum varying with the normal size of the establishment’s workforce. This imposes additional obligations on an employer including to give 30 days’ notice to the Minister for enterprise Trade and Employment in advance of making any dismissals and facilitating a consultation process with employee representatives.

Entitlements on Redundancy

The basic legal entitlement where a redundancy occurs is a statutory redundancy payment. This is calculated at 2 weeks’ pay per year of service with an additional bonus week. Importantly, this pay is capped at €600 per week.

Ther is a custom and practice in employee relations in Ireland that employers will make a payment in addition to the statutory redundancy payment. This is referred to as an ex-gratia payment.

Our specialist Employment Law solicitors deal with redundancies situations from across a very large number of sectors on a daily basis. Please contact our office, email: mail@danielspring.ie or Phone: 01 644 9999 to arrange a consultation in relation to your situation.

This information is provided for information purposes only and does not constitute legal advice. Specific legal advice in relation to your situation should always be taken prior to taking any action on foot of this information.