Working for Work 16th Edition 2009 Chapter 3 - page 41
redundancy. The amount of the statutory payment is related to the employee's length of service, normal weekly or monthly earnings (including base salary, regular overtime, payment-in-kind) up to a weekly maximum of €600 per week from 1st January 2005.
Redundancy Applies when;
- An employer ceases to carry on business.
- An employer's requirements for employees has ceased or diminished.
- An employer has decided to carry on the business with fewer or no staff. In this case, close members of the employer's family are not taken into account.
- An employer has decided the work is to be done in a different manner in future and the employee is not sufficiently qualified or trained to do the work in the required manner.
Qualifying for a Redundancy Payment
Not all employees are entitled to the statutory redundancy payment, even where a redundancy situation exists. To be eligible for a payment under the Redundancy Acts, the employee must satisfy the following requirements:
- Be aged over 16 years of age.
- Be in employment that is insurable for all benefits under the social welfare system (PRSI Class "A").
- Have worked continuously for the employer for at least 104 weeks.
- Have been in continuous employment for more than two years if a Part-time worker.
- The same rules apply to apprentices. Apprentices qualify for redundancy unless let go within one month of completing an apprenticeship.
Employers must give proper written notice of redundancy of at least two weeks, the minimum period, to both the employee and to the Department of Enterprise, Trade and Employment. During this period, an employee should be given reasonable time-off to look for other work.
The amount paid in redundancy relates to the employee's length of continuous service and weekly earnings up to a maximum of €600 per week. If the lump-sum payment is under €10,160 (plus €765 for each full year of service) you do not pay tax on it. The employer must pay the lump-sum directly to the employee.
