What you should know about Redundancies

Do you think you need to make employees redundant? 

Are you wondering whether there is anything you can do to avoid this? 

Want to know what your options are? 

Let’s look at the law surrounding redundancy. 

Firstly, you need to understand that there are two types of redundancy situation recognized in Irish law: 

  • A collective redundancy situation and a non-collective redundancy 

This blog is about non-collective redundancy only. That is, a situation where you, as an individual, are at risk of losing your job by reason of redundancy and it is not a collective redundancy situation. 

What is a redundancy?

A redundancy will exist if the circumstances fall into one of the 5 definitions set out in the Redundancy Payments act 1967. These are: 

  • For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly to— 
  • ( a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or 
  • ( b ) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or 
  • ( c ) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or 
  • ( d ) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or 
  • ( e ) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained, 

If your termination falls into one of these categories it is a genuine redundancy. If it does not then it may not be a genuine redundancy, it may be a sham. 

Lay off or Short Time

A lay off or short time might give rise to a right to the employee serving a notice claiming redundancy. However, the employer can serve a counter notice if he believes he will be able to provide work within 4 weeks of receiving the notice from the employee. 

This work must last for at least 13 weeks. 

Notice of Redundancy 

The employee is entitled to at least 2 weeks’ notice of the proposed dismissal (section 17 Redundancy Payments Act 1967). This is a statutory minimum and you are entitled to a greater notice period in accordance with your contract of employment, if it is contained in your contract. 

Where an employer is unable to pay redundancy 

There is a scheme run by the Department of Employment Affairs and Social Protection called the Insolvency Payments Scheme. Provided certain criteria are met an employee may be paid from this fund. 

Disputes about redundancy terminations 

If an employee has any dispute about his/her redundancy they can bring their claim to the Workplace Relations Commission. 

Employer’s conduct during redundancy decision 

The employer is obliged to act reasonably in arriving at the decision to terminate the employment by reason of redundancy. He should have given the employee the opportunity to put forward suggestions to save his job or to do alternative work or suggest ways that the business could be run more efficiently to obviate the need for a redundancy. 

He should also have used some type of objective criteria by which to decide to make one employee redundant as opposed to another. If the employer has a choice between more than one employee, then the choice of who will be terminated must be made fairly. 

The key for the employer is to act fairly and reasonably and look at all options short of redundancy. If he has done this, however, the redundancy decision should be sound and capable of withstanding a claim of unfair dismissal.