Redundancy Advice Guide

16 April 2019

See ‘Ex-gratia Redundancy Pay’ and ‘Taxation of Redundancy Payments’ - 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 weeks’ 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.   If an employee works variable hours from week to week then the employer must calculate the average weekly pay due to that employee by reference to the average hours worked per week in the last 52 weeks worked by that employee leading up to the date of redundancy. If the employee is a shift-worker or a piece-worker then the average of the 26 weeks prior to the end of the 13th week before the date of redundancy should be used. Employers qualify for a redundancy rebate on any statutory redundancy payment.   Employers may, if they so wish, pay an employee who is being made redundant a sum of money over and above the statutory minimum redundancy pay. This is known as an ex-gratia redundancy payment and it is a discretionary sum of money. Any ex-gratia payment given does not qualify for a redundancy rebate. See ‘Redundancy Rebate’

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