Last Friday, the 12th June, it was announced that the iconic Clerys was going into liquidation. The saddest and worst part of this story is not that an Irish institution has closed, but that so many jobs just vanished in an instant. The manner in which so many long serving employees were treated is sickening. This calamity raises fears for others in employment, who are now aware of how unstable ones’ future can be.
Since this story broke, we, in the Employment Department at Cantillons Solicitors have been inundated with queries about redundancy and how it works. The following is a general outline of Redundancy Law.
What is Redundancy?
Redundancy arises when a job no longer exists. The key point to remember with redundancy is that it is the job that is redundant, as opposed to the person. Replacement of an employee is not a redundancy as the job is not redundant. Some examples of where and when redundancy can arise are:
An employer ceasing to carry on its business or an arm of its operation.
The business has diminished.
The job is to be carried out at a different location – However, it could be argued that, in this situation, the employee should be offered the opportunity to move to the new location.
The job is to be done in a different way, requiring qualifications which the employee does not have.
The job can be done by other employees.
Where a position has been made redundant, the redundant employee may have statutory rights which may provide some relief. These rights are largely based on years of service.
Employees are entitled to:
1. Notice of Termination of Employment
Employees with at least 2 years continuous service must get at least 2 weeks written notice of the redundancy. This is the minimum, and depending on your years served or your contact of employment you may be entitled to more notice, e.g. if you have been in continuous employment with that employer for the last 5 – 10 years, then you are entitled to 4 weeks’ notice.
Employees with less than 2 years continuous service are entitled to at least 1 weeks’ notice, or the notice period provided for in their contract of employment, if that is greater than 1 week.
2. Redundancy Payment
Employees with at least 2 years continuous service are entitled to a minimum statutory redundancy payment – this is 2 weeks normal pay for every year of continuous service, plus, 1 additional week’s pay. The maximum an employee can receive for a week’s pay is capped at €600 – i.e. if you receive a weekly wage of €900 for the last 15 years, for the purpose of your redundancy payment, it will be deemed to be €600 per week. The redundancy payment should be claimed from and paid by the employer. However, where an employer is insolvent and unable to pay the redundancy, then an employee can apply to the Department of Social Protection for payment of the monies owed, from the Social Insurance Fund.
Employees with less than 2 years continuous service are not entitled to a statutory redundancy payment but there may be something in your contract of employment that entitles you to payment.
3. Time to look for New Employment
Employees with at least 2 years continuous service are entitled to reasonable paid leave in order to look for new employment.
Employees with less than 2 years continuous service are not entitled to paid leave in order to look for new employment.
4. Fair Procedures
The specific legislation around redundancy does not deal with fair procedures, however, employers must be reasonable and fair when making an employee redundant.
For example, an employer should, prior to making an employee redundant:
Consider an alternative to redundancy, including considering alternative employment for the affected employee.
Consult with the affected employee – enquiring of the employee would they relocate, would they consider alternative employment. The employer should request from the employee alternative suggestions and these should be considered by the employer.
The employer should ensure that any method they are using to determine who is to be made redundant is fair, reasonable and open.
Its only when disasters like that of the Clerys situation arise, that we realise how vulnerable our employment is. It is essential that employees know their rights, and should these rights be violated, challenge the violator.
Contact us at Cantillons Solicitors at +353 (0)21 -4275673 or [email protected] if you would like more information.