See also ‘Redundancy Pay’ and ‘Taxation of Redundancy Payments’ – Ex-gratia redundancy pay is the payment of an additional lump sum which is over and above and in addition to one’s statutory redundancy entitlements. If an employee is made redundant then they qualify for statutory redundancy pay if they have 104 weeks continuous reckonable service or more with the employer in question. Statutory redundancy pay amounts to two week’s pay per each year of service, plus one bonus week. Thus, if an employee has exactly 3 years’ service they are entitled to [(3 years x 2 weeks) + 1 bonus week) = 7 weeks redundancy pay. The weekly pay is based on the normal weekly wage earned by that employee during their employment, including commission or other varied payments, but it is subject to the statutory ceiling of €600 per week. Thus, if the employee with 3 years’ service earned €800 a week then their statutory redundancy is capped at (7 weeks x €600) = €4200. Any part years’ service should be included when calculating the employee’s redundancy entitlement.

 

Employers may, if they so wish, pay an employee who is being made redundant an additional ex-gratia lump sum but to do so is entirely discretionary and if the employer does wish to provide an additional ex-gratia payment then the amount to be given is also discretionary. Importantly, any ex-gratia payment given does not qualify for a redundancy rebate. See ‘Redundancy Rebate’