Let's Talk Redundancy
Redundancy occurs when an employee loses their job due to circumstances such as the closure of the business or a reduction in the number of staff. There are many reasons why an employee could be made redundant, such as the financial position of the company, lack of work, reorganisation with another organisation, or the company closing completely. Being made redundant can be an extremely tough situation for the employee, it is important as an employer to understand how the employee may feel at this time and make them aware of the support that is available to them.
Who is eligible for redundancy?
An employee is entitled to a redundancy payment after they have two years’ service. To be eligible for a redundancy payment:
- The employee must be over the age of 16,
- Be in employment that is insurable under the Social Welfare Acts,
- Have worked continuously for their employer for at least 104 weeks over the age of 16
- Your role has been made redundant
Part-time workers cannot be treated any different to the full-time workers but still must meet the requirement of the two years’ continuous service.
Redundancy Procedures
Employers must follow certain procedures when making an employee redundant. They must be fair and reasonable upon the selection of choosing people to be made redundant.
Some examples of fair selection include:
- Last in, first out - The newest staff is the first to go
- Voluntary redundancy
- Point system - Employees doing the same job are ranked by objective criteria such as attendance record, the standard of work done, skills and qualifications.
If employees feel they have been unfairly selected for redundancy you can bring a claim of unfair dismissal.
Notice of redundancy
The notice period (time given to employees before they are made redundant) goes up depending on how long the employee has worked for the employer.
- Between 2-5 years – 2 weeks’ notice
- Between 5-10 years – 4 weeks’ notice
- Between 10-15 years – 6 weeks’ notice
- Over 15 years – 8 weeks’ notice
Offering alternative work
Before the role can be made redundant, the employer may offer the employee another job in the business. This is known as alternative work. This alternative work should be given to the employee in writing and provide full information about the offer.
If the employee accepts the alternative role, they may take it up on a trial basis for up to four weeks. However, the employee will not be entitled to claim redundancy if:
- They accept a new contract with immediate effect, and the terms of employment are the same as their previous contract
- They accept an offer in writing for a new and different contract which will start within four weeks of their previous contract ending.
If the employee refuses a reasonable offer of alternative work from the employer, they may lose their entitlement to a redundancy payment.
If the employee loses status, have worse terms and conditions of employment or must travel an unreasonable distance to work this will not be considered as a reasonable alternative.
