Redundancy

There is a misconception that when you are being made redundant that you are being sacked although there is a key difference. Redundancy isn’t as a result of anything you’ve done wrong and it should only occur when your role is ceasing to exist. When a redundancy situation arises, there is a duty on your employer to make sure you are treated fairly and receive everything you are due.

Depending on the situation, you may be able to challenge the way in which you have been selected for redundancy.

If you would like to discuss a redundancy situation, please contact Mark Collins of this office. It is important that you understand your rights and that you receive the proper financial package when being made redundant.

Redundancy Payments

If you have been made redundant, have been advised that your role is at risk, or if you have been approached to consider voluntarily departing your role, it is important that you seek independent legal advice to ensure you are fully aware of your rights before and after executing a severance agreement.

In order to qualify for a statutory redundancy payment, you must have a minimum of two years’ continuous service with your employer. This arises out of the Redundancy Payments Act of 1967-1991. As such, not all employees are entitled to a redundancy/severance package. When calculating your total length of service, there may be an adjustment made for absences from work, but this only applies to time off work in the last three years.

If you qualify for redundancy then you are entitled to be paid a statutory severance payment, which is calculated as two week’s pay for every year of service, and one further week’s pay.  This is paid tax-free but is capped at €600 per week even if your pay is greater per week.

In some cases, your employer may agree to pay you more than the statutory amount, perhaps in the form of an ex gratia payment where certain tax reliefs may be claimed

Compromise Agreements/Severance Agreements

If you are accepting voluntary redundancy or are in receipt of an ex gratia payment arising from redundancy, your employer will arrange for you to execute a compromise agreement/severance agreement. You should receive legal advice before executing such an agreement.

The agreement will set out the terms of an employee’s termination and each parties obligations going forward such as payments, return of company property, non-competes, waiver of claims etc.

If you require legal advice in relation to redundancies or severance agreements, please contact our office on 01 4900121 or info@tomcollins.ie.

**The above information is a broad outline and does not constitute legal advice.