Analysis: any business that is based in Ireland is legally obliged to comply with comprehensive laws on redundancies
Many employees in the tech and pharmaceutical industries based in Ireland have recently found out that they are being made redundant. The manner in which employees have been notified about potential redundancies by certain employers has been less than satisfactory from an employment law perspective.
Undoubtedly, this is a hugely stressful time for staff working for these businesses and understandably many are unfamiliar with redundancy processes and want to know what their legal rights and entitlements are in this situation. Irrespective of whatever the business case might be for redundancies, any business based in Ireland is legally obliged to comply with Irish law on redundancies.
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From RTÉ Radio 1's Morning Ireland, Cathy Maguire, barrister specialising in employment law, on workers' rights under redundancy legislation
When can employers make people redundant?
Redundancy can occur when an employee is dismissed as their job or position in the business is no longer required and ceases to exist. There must be genuine reasons for redundancies. Financial difficulties, restructuring of the nature of the business, decisions to shut a business and changing needs for work skills are all legitimate factors that can result in employers announcing redundancies.
Is it a voluntary or compulsory redundancy?
When jobs have to be cut, employers may seek voluntary redundancies in the first instance (voluntary redundancy may also be referred to as non-compulsory redundancy). Employers may engage with employees to consider voluntary redundancy, whereby employees are offered a compensation package to encourage take up.
In some circumstances, employees may be provided with an option to take up alternative employment in the business instead of redundancy if the position that they were originally hired for no longer exists, but alternative work is available. However, offers of suitable alternative work may negate an employee's entitlement to redundancy pay if the employee unreasonably refuses this offer of alternative work.
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From RTÉ Radio 1's Drivetime, are the Twitter redundancies the start of the end of the tech boom?
Compulsory redundancy will occur in those situations where an employer has legitimate reasons to cut jobs. The employer will identify those employees who are to be made redundant and should engage in formally notifying employees of redundancy. As part of this process, employers must ensure that the selection criteria used to choose employees for redundancy is fair, transparent and objectively justifiable. If a pre-determined redundancy procedure exists within the organisation then this ought to be complied with.
How does an employer select who to make redundant?
Redundancy selection procedures may be contained in the contract of employment or a trade union agreement. It may even be a well established and known custom and practice in a particular workplace. For example, there may be a custom that employees are selected on the basis of a 'last in, first out’ policy. Failure to apply fair procedures would entitle employees to bring a claim for unfair dismissal.
When selecting people for redundancy, employers must also adhere to employment equality legislation. Employees have legal protection against discrimination on any of the nine grounds set out in the Employment Equality Acts 1998-2015 when applying for a job. They also have a right to bring a legal claim if it is apparent that the reason they have been selected for redundancy is based on their gender, race, age, civil status, family status, disability, sexual orientation, religion, membership of the Traveller community.
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From RTÉ Radio 1's Drivetime, employee Inga Dainauskiene and solicitor Mairead Carey discuss the case they took against Rudd's sausage factory, after Rudd's made Inga redundant when she returned from maternity leave
What is a a collective redundancy?
If an employer is seeking to make a minimum number of employees redundant within a 30 day period, this is known as a collective redundancy. The number of employees that will constitute a collective redundancy varies subject to the size of the business:
- 5 employees in an establishment that employs more than 20 and less than 50 employees;
- 10 employees in an establishment that employs at least 50 and less than 100 employees;
- At least 10% of employees in an establishment that employs between 100-299 employees
- 30 employees in any establishment normally employing more than 300 employees
Employers are legally obliged to engage in an information and consultation period with employee representatives before collective redundancies take place. As part of this process, employers must provide information about the proposed location for the collective redundancies, current number of employees, the proposed number of jobs and job categories which will be affected by redundancy. This information must be shared with employee representatives. Employers must provide written reasons for these collective redundancies with this formal notification. Employers are also required by law to formally notify the Minister of Enterprise, Trade and Employment in these circumstances.
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From RTÉ News on November 5th, collective redundancy notice not yet filed by Twitter to Department of Enterprise
During this 30 day consultation period, employers are prohibited from issuing notice of redundancy to employees. Failure by an employer to initiate or engage in the consultation process with the employees’ representatives is an offence, and the employer could be liable for a fine up to €5,000. If an employer proceeds with issuing notice of redundancy during the 30 day consultation period, this will amount to an indictable offence and, if found guilty employers would be liable for a fine up to a maximum of €250,000.
Am I entitled to redundancy pay?
Redundancy payments legislation was introduced in 1967 to help alleviate the financial stress of those employees who lost their jobs through redundancy. This legislation confers certain statutory rights and entitlements on these employees. While it may seem obvious to state, you must have been dismissed by reason of redundancy in the first instance to be eligible to claim statutory redundancy pay.
Entitlement to statutory redundancy pay is not an automatic right. To qualify for statutory redundancy pay, there is a requirement that you are over the age of 16; deemed an insurable person for the purposes of the applicable social welfare legislation; and importantly that you have been in continuous employment with the employer for a period of at least 2 years (104 weeks).
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From RTÉ News in July 2015, Ingrid Miley reports that the State is to pay put significant sums for Clerys redundancy payments
Your employment status and length of continuity of service are critical components determining your eligibility for statutory redundancy pay. Absences from work due to strike action, illness for longer than 26 weeks, occupational sick leave for a period more than 52 weeks, and situations involving temporary lay off from work are excluded from calculating continuity of service.This would have implications for any persons who are not directly employed by the business, as well as those working less than the requisite 104 weeks as they would be excluded from qualifying for statutory redundancy payment.
If you do qualify for statutory redundancy pay, you are entitled to be paid two weeks gross pay for every year of service (capped at a maximum of €600 per week) plus one additional week’s pay (also capped at €600). Statutory redundancy pay is paid as a lump sum and is not taxable. Employers may decide to provide employees with an ex gratia payment, which is more than the statutory minimum rate as part of the redundancy package.
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Those employees who qualify for statutory redundancy have a right to request paid time off work to seek alternative employment. Furthermore, any contractual or statutory notice periods regarding termination of the employment contract must be complied with. Complaints about the redundancy process, including those concerning employers who have failed to comply with their statutory obligations to consult with employees about collective redundancies can be submitted to the Workplace Relations Commission.
The views expressed here are those of the author and do not represent or reflect the views of RTÉ
