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Employment Law - Redundancy

Redundancy refers to a dismissal which is prompted by the need to eliminate or fundamentally change a particular role, and as a result the person carrying out the role is made redundant.

Examples of how this situation might arise include:

  • the organisation is relocating to a significant distance away and therefore the role which the employee was carrying out at a particular location no longer exists there
  • the organisation, or the part of the organisation where the employee works, is ceasing or diminishing due to loss of business or poor financial position
  • a particular role is no longer required by the organisation due to loss of business/changes in the market/internal rationalisation or re-structuring etc, and ceases to exist
  • there is a financial need for an overall reduction in the size of the workforce or the size of a department, and the tasks associated with a particular role are to be shared out among others.

Rules differ on the procedure to adopt depending on how many employees are to be made redundant but in all cases, it is important to act fairly and in a non-discriminatory way to ensure a fair dismissal.


Recent developments

Redundancy Payments (Amendment) Bill

On Friday 21 January 2022 the Government published the Redundancy Payments (Amendment) Bill. Employees who have lost out on reckonable service while they were on lay-off due to COVID-19 restrictions, and have subsequently been made redundant, will be able claim a once-off payment of up to a maximum of €1,860 tax-free. This payment is designed to bridge the gap in their redundancy entitlements. A worker does not have to have been in receipt of any form of State payment, such as the PUP or Jobseekers Allowance, during the lay-off period, to qualify for this payment. The criteria for this payment are simply that the person qualifies for redundancy in the standard way and was laid off because of COVID-19 restrictions during the emergency period. This Bill will ensure that people who were made redundant are not out of pocket because of any period during which they were placed on lay-off due to COVID-19 restrictions.

This scheme will be funded and administered by the Government. It is hoped that this payment will help resolve potential disputes between employers and employees in relation to redundancy entitlements. Essentially this payment will ensure that the employee being made redundant will receive the same total redundancy payment as though they had not been laid off during the COVID-19 pandemic. The total amount that an eligible employee will receive will depend on the length of time they were placed on lay-off due to COVID-19, before the date on which they were made redundant.