The following information provides a brief overview of Redundancy. For more information, please Contact the INOU.
The purpose of the Redundancy Payments Scheme is to compensate workers, under the Redundancy Payments Acts 1967 to 2013, for the loss of their jobs by reason of redundancy – subject to a gross earnings ceiling of €600 per week.
It is the responsibility of the employer to pay statutory redundancy to all its eligible employees. Where an employer can prove to the satisfaction of the Department of Employment Affairs and Social Protection that it is unable to pay statutory redundancy the Department will make lump sum payments directly to those employees and will seek to recover the debt from the employer.
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
Types of Redundancy
- Statutory Redundancy
- Voluntary Redundnacy
- Voluntary Severance
Redundancy – Qualifying for a Redundancy Payment
Not all employees are entitled to the statutory redundancy payment, even where a redundancy situation exists. In order to qualify for a redundancy payment, an employee must:
- have at least two years continuous service;
- be in employment which is insurable under the Social Welfare Acts;
- be over the age of 16 and
- must have been made redundant as a result of a genuine redundancy situation meaning that the job no longer exists and he/she is not replaced.
An apprentice can also qualify for redundancy during the period of his/her apprenticeship or if dismissed beyond one month of completing the apprenticeship.
Employers must give written notice of dismissal of at least two weeks, the minimum period, to the employee. During this period, an employee should be given reasonable time-off to look for other arrangements for training for future employment.
Redundancy – Employer Unable to pay Redundancy
If your employer has not paid your redundancy lump sum, you should apply to your employer for it using form RP77. It is the responsibility of an employer to pay statutory redundancy payments to all eligible employees. If your employer claims an inability to pay it, you can apply to the Department of Employment Affairs and Social Protection for direct payment from the Social Insurance Fund. You apply online www.welfare.ie using form RP50. Once you have submitted your claim online you must print off the RP50 form. This form must be signed by both employee and employer or employer representative. The original signed form should be submitted to the Redundancy Payments Section; Department of Employment Affairs and Social Protection, Block C, Earlsfort Centre, Lower Hatch Street, Dublin 2.
- If your employer is unable to pay your redundancy lump sum, they should sign the RP50 and submit a letter from an accountant or solicitor stating they are unable to pay and accepting liability owing to the Social Insurance Fund together with documentary evidence such as audited accounts
- If your employer refuses to pay your redundancy lump sum or if there is a dispute about redundancy you can bring a claim to the Employment Appeals Tribunal using the new single complaint form available from the new WorkPlace Relations Service – www.workplacerelations.ie . This must be done within one year of your dismissal. To apply for your lump sum you should send a completed form RP50 together with a favourable decision from the Employment Appeals Tribunal to the Redundancy Payments Section at the address above.
The time-limit for submitting an application for a redundancy lump sum payment is 52 weeks from the date of termination of employment. The Employment Appeals Tribunal (EAT) has discretion to extend the 52 week time-limit to 104 weeks in certain circumstances.
Redundancy – Voluntary Redundancy
Voluntary Redundancy occurs when an employer, faced with a situation where s/he requires a smaller workforce, asks for volunteers for redundancy. The people who then volunteer for redundancy are, if they fulfil the normal conditions, eligible for statutory redundancy. There must be a genuine redundancy situation in the first place. Persons who take a voluntary redundancy are entitled to claim Jobseekers Benefit, and cannot be disqualified from seeking to claim Jobseekers Benefit because they volunteered for redundancy. If you are under 55 and get a redundancy payment of more than €50,000 you can be disqualified from claiming Jobseeker's Benefit for up to 9 weeks – contact the INOU on (01) 856 0088 for more information.
Very often voluntary redundancy offers can include an additional, or ex-gratia, payment on top of your statutory redundancy payment. If you have been offered voluntary redundancy and refuse to accept it, you may be made compulsory redundant at a later stage. If this occurs you may only have entitlement to receive the statutory redundancy payment, without any additional or ex-gratia payment that may have been paid to those who accepted voluntary redundancy.
Redundancy and the Universal Social Charge
Statutory redundancy payments are exempt from the USC. In addition, exgratia redundancy payments in excess of the statutory redundancy amount are exempt from income tax, and therefore also the USC, up to certain limits.
These limits are up to €10,160 plus €765 per complete year of service in excess of the statutory redundancy. The basic exemption can be further increased by up to €10,000 if the person is not a member of an occupational pension scheme and has not received a redundancy payment in the last 10 years. There is a lifetime tax exempt limit of €200,000 on ex-gratia payments.
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- individual unemployed people
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The aim of our service is to ensure that unemployed people, and those in receipt of Social Welfare payments seeking to return to employment, have access to comprehensive Welfare Rights information and advocacy services, directly from the INOU or through our network of Welfare Rights providing affiliates around the country.
As part of our service we provide:
- information supports by telephone and e-mail
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You can speak, in complete confidence, to an Information Officer in the Information and Advocacy section directly at 01 - 856 0088 , Monday - Friday 9.30 am to 5.00 pm.
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- INOU Affiliate Organisations
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Last Updated: 08/03/2018