An Overview of Redundancy ProcessesPosted in : HR Updates ROI on 18 May 2020
Numerous businesses are unfortunately faced with re-structuring their organisations as a result of the COVID-19. Unfortunately, decisions have to be made to maintain the survival of many organisations; these tough decisions will include redundancy. When an employer decides they may need to make a role redundant it is vital to seek advice on the process - especially the consultation phase required under Redundancy Payments Acts of 1967 – 2007 to eliminate risks to the business. The HR Suite offer support, guidance and advice to organisations to ensure your business is compliant with legislation and also to help your business through this difficult period.
It is important to note that redundancy is still a termination of employment therefore a risk is attached to the same. Although a redundancy situation may exist, employees may have grounds for complaint if the manner of the selection for redundancy was deemed unfair or that a genuine redundancy situation does not exist. An employee can take a case under the unfair dismissals legislation and be awarded up to two years of salary. This amount does not include preparation of the submissions for the day on behalf of the Company and legal costs for representation i.e. a HR Consultant / Solicitors etc.
Under the unfair dismissal’s legislation, selection for redundancy based on certain specific grounds is considered unfair. These include redundancy as the result of an employee's trade union activity, pregnancy or religious or political opinions. The Employment Equality Legislation also prohibits selection for redundancy that is based on any of the following nine grounds: gender, civil status, family status, age, disability, religious belief, race, sexual orientation or membership of the Traveller community.
To qualify for redundancy employees must have:
- Employees must have worked continuously for at least 104 weeks over the age of 16.
- The position they hold must cease to exist. It is important to remember that it is always the position not the person that is made redundant.
Collective redundancies arise where, during any period of 30 consecutive days, the employees being made redundant are: 5 employees where 21-49 are employed, 10 employees where 50-99 are employed, 10% of the employees where 100-299 are employees, 30 employees where 300 or more are employed. The redundancy legislation requires that the Company must consult with the employees as soon as is reasonably practical but not later than 30 days in the case of collective redundancy. The following matters should be addressed in the employee consultancy phase:
- The reasons for the redundancy
- The number and descriptions of the employees affected
- The number and descriptions of employees normally employed
- The period in which the redundancies will happen
- The criteria for selection of employees for redundancy
- The method of calculating any redundancy payment e.g. just statutory or an additional ex gratia
The employer is also obliged to inform the Minister for Jobs, Enterprise and Innovation in writing of the proposed redundancies at least 30 days before the occurrence of the first redundancy.
In selecting employees for redundancy, the Company must apply selection criteria that are reasonable and are applied in a fair manner. The Company should consider all options including possible alternatives. If there is an alternative position available, it must be put to the employees. If they refuse a reasonable offer, then it may be a case that they lose their entitlement to a redundancy payment. An employee may take up an alternative on trial for up to four weeks.
The redundancy legislation states that each employee with two years continuous service is entitled to two weeks’ salary for every year of service plus one bonus week. The payments will depend on their length of service, hours of work and gross salary.
Finally, it is vital to highlight that there was emergency legislation enacted by the government which temporarily prevents an employee from seeking to be made redundant potentially triggering an entitlement to a statutory redundancy lump sum payment during the "emergency period" defined as the period between 13 March – 31 May 2020 the country is experiencing due to COVID-19. Employees who were on lay-off or short-time working, would have been entitled to apply for redundancy if the situation continues for more than four weeks, or for six weeks in the last 13 weeks. This emergency legislation has helped employers and employees maintain their jobs and avoid redundancy scenarios; this emergency legislation expires on 31 May 2020 and hopefully the government will try to gain an extension on the same.
The HR Suite can certainly guide you through the process and offer assistance in providing you with the written communication needed to make a role redundant. Please do not hesitate to contact The HR Suite should you wish to discuss this matter further or if clarifications are required on 066-7102877 or email@example.com.
More on Redundancy & Reorganisation
- Redundancy for Employees With Less than Two Years’ Service – How Do I Handle It?
- Guidance for Employers implementing a redundancy selection process in the wake of COVID-19
- Coronavirus and Discrimination: The balance between protecting employees and avoiding unlawful discrimination claims
- How To: Successfully Manage Cutbacks In The Pandemic
- Collective Redundancy – an Overview of the Law
The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.