Redundancy

EMPLOYMENT LAW for business

Redundancy, commonly arises in three situations:

  1. The business needs fewer employees in a role or the role is no longer required for example due to a downturn in business a manufacturer requires less factory staff or decides that the function carried out by the factory workers will be outsourced oversees.
  2. Business closure.
  3. The business restructures to improve efficiency or to stay competitive in their current market for example a new computer system within the accounts department may reduce the number of accountant’s or administrators within the business.

What process must be followed when making staff redundant?

Once an employer has arrived at the decision that redundancies are necessary they are obliged to follow a set procedure in implementing the redundancies. Broadly speaking this procedure should include:

  • Identifying a relevant pool of employees for selection;
  • Informing the affected employees of the redundancy situation;
  • Engage those employees in a meaningful  and genuine consultation process;
  • Considering the possibility of alternative employment.

Failure to follow his procedure can lead to successful claims for unfair dismissal on the ground that the redundancy process and so the dismissal were procedurally unfair.

How do I calculate statutory redundancy payments for my staff?

Only employees with two years’ service are entitled to redundancy pay.

The amount of redundancy payment is based on the employee’s age, length of continuous service and gross average wage at the date of when redundancy occurs.  This is worked out as follows:

  • Half a week’s pay for each full year if the employee is under 22.
  • 1 week’s pay for each full year the employee is 22 or older, but under 41.
  • 1.5 week’s pay for each full year the employee is 41 or older.

There is a cap on the weekly pay, which changes in April every year.

Calculate your redundancy liability here

How can we help?

If you are going through a redundancy or restructure process, we are experts in this area and can advise and assist you through the process. Call a member of the team on 01133504030 or complete the contact form for a free 30 minute telephone consultation.

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