What redundancy rights do employees have?

My employer has made me redundant but did not consult with me. What can I do?

Failure to have reasons and/or to follow fair procedures in terminating an employee’s employment may result in an employee succeeding in a claim against the employer for unfair dismissal.
Redundancy is a reason for which you can lawfully dismiss an employee.  However, the employer would have to follow a fair procedure, which would involve a consultation process.  Where fair process has not been applied, an employee could bring a claim to the Workplace Relations Commission for unfair dismissal.

Where an employee is successful in an unfair dismissal complaint, the remedies are as follows:

• reinstatement with back pay;
• re-engagement in the same or a similar position; and/or
• compensation of up to two years’ remuneration based on the employee’s loss.  The employee has a duty to mitigate their loss by seeking alternative employment.

This redundancy affects a large portion of the workforce.  Is it a collective redundancy?

Collective redundancies are governed by the Protection of Employment Act 1977, together with a number of statutory instruments.   Collective redundancy is a redundancy that involves making a specified number of employees in an establishment redundant within a 30 days consecutive period.

The specified number of employees varies depending on the size of the employer’s workforce. The statutory thresholds are:

Therefore it will depend on the number of employees who are being made redundant and how many employees there are in the total workforce as to whether there are requirements for a collective consultation.

This is a collective redundancy.  What obligations do employers have?

In a collective redundancy situation, an employer is required to:-

• supply certain information to the employee’s representatives and to consult with the employee’s representatives; and
• notify the Minister of the proposed collective redundancies and to provide certain information to the Minister.

The legislation requires the employer to give the employee representatives all relevant information relating to the proposed redundancies, and that information should be provided to the Minister for Enterprise, Trade and Employment as soon as possible.

The legislation requires consultation to be “initiated at the earliest opportunity and in any event at least 30 days before the first notice of dismissal is given”.  The Minister should also be notified 30 days in advance of any notice of dismissal being given to employees.

An employer who fails to initiate consultations or fails to provide the information required as set out above shall be guilty of an offence and shall be liable on summary convictions to a fine not exceeding €5,000.

If a complaint is made to the Workplace Relations Commission that either the employee’s representatives were not consulted with or the information was not provided an adjudication officer may require compliance with those requirements or order the employer to pay to the employee compensation of up to four weeks remuneration.  This compensation is payable per employee.

Failure to notify the Minister in accordance with the legislation can leave an employer liable to a fine of up to €5,000.  If any collective redundancies take effect before the expiry of the 30 days which begins on the day that notification is given to the Minister, the employer shall be guilty of an offence and liable to conviction on indictment to a fine not exceeding €250,000.

Should I get a statutory redundancy payment?

Whether you get a statutory redundancy payment will depend on how long you have worked with your employer. Statutory redundancy payments applies to employees who have 104 week’s continuous service – provided the employee was an employed contributor in employment which was insurable for all benefits under the social welfare legislation immediately prior to termination.

Statutory redundancy payments are exempt from income tax.

An employer may also give a separate ex-gratia payment on top of the statutory redundancy payment. It would be useful for the employee to know whether in previous redundancies the employer has given an ex-gratia payment or whether the employer has a redundancy policy in place.

How much is a statutory redundancy payment?

If you are an eligible employee then you would be entitled to:

• two week’s pay for each year of service; plus
• one additional bonus weeks’ pay.

There is a cap on the amount of a statutory redundancy payment.  There is a ceiling of €600 per week or €31,200 per year.  The calculation of the pay is by reference to the current normal gross pay.  It may include regular overtime, benefits in kind and any bonus or commission payments.

Any employees or employers who have queries about their employment rights in a redundancy should contact the Employment Law team at Reddy Charlton.

For further information on this topic, please contact Laura Graham at lgraham@reddycharlton.ie