Redundancy and Alternatives to Redundancy Clare Ferguson H

Redundancy and Alternatives to Redundancy Clare Ferguson H. R. Outsourcing, 3 Parnell Street, Waterford Tel. 051 820101 Email: hr@hroutsourcing. ie www. hroutsourcing. ie

Overview • • • Introduction Redundancy Legislation Selection Criteria Notice Periods Redundancy Payments Alternatives to Redundancy: Lay-off, Shorttime and other alternatives

Introduction • Current economic climate forcing reductions in staff costs • Cost-cutting measures to consider: Redundancy, Lay-offs, Short-time • Keeping Your Productive People

Redundancy Legislation • Obligations on employers under the following acts: – Redundancy Payments Acts 1967 -2007 – Unfair Dismissals Acts 1977 -2007 – Protection of Employment Act 1977, 2007 • Definition of Redundancy: – Redundancy occurs when an employee is dismissed for one or more reasons not relating to the employee concerned

Selection Criteria • Voluntary Redundancies • Selection of employees for compulsory redundancy must be on objective grounds • ‘Last-in, first-out’ criteria (all else being equal) • It is important to ensure that the selection criteria chosen: – Does not discriminate (Part-time, Fixed term workers) – Ensures the required skill-set is maintained in the business

Notice • Collective Redundancies and Notice – What is a Collective Redundancy? – Consultation must take place 30 days before the first notice is served – Formal Notice to Minister for Enterprise, Trade and Employment • In the case of any termination of employment, a minimum notice period applies, dependent on the length of service: Length of Service Minimum Notice 13 weeks- 2 years 1 weeks’ notice 2 - 5 years 2 weeks’ notice 5 -10 years 4 weeks’ notice 10 -15 years 6 weeks’ notice >15 years 8 weeks’ notice • The notice period stated in a contract of employment will over-ride the notice periods above if a longer period of notice is outlined in the contract. • Payment in lieu of notice may apply if stated in Contract of Employment or on agreement with employee.

Redundancy Payments • An employee who is terminated on the grounds of redundancy is entitled to a redundancy payment, providing they have 104 weeks (2 years) continuous service with the company after reaching the age of 16. • Statutory Redundancy payments are calculated as follows: – 2 weeks’ gross pay for each year of continuous employment + 1 additional weeks’ gross pay • The statutory payment is capped at € 600 gross earnings per week and all statutory payments are tax-free • 60% rebate can be claimed by employers from the Department of Enterprise, Trade and Employment. • Ex-Gratia Payments

Alternatives to Redundancy (1) • Lay-off – Lay-offs arise where employment ceases temporarily due to the employer being unable to provide an employee with work for which s/he was employed to do – Employers may lay-off their workforce where it is reasonable to believe that the lay-off will not be permanent. – Employees are not entitled to be paid during the lay off period – Notice must be given to the employee, although no set periods of notice apply.

Alternatives to Redundancy (2) • Short-time – Short-time occurs where an employees’ pay is less than half of his/her normal weekly pay or their hours of work are reduced to less than half of his/her normal weekly hours. – Employees receive pay in respect of hours actually worked during periods of short time – Notice must be given to the employee, although no set periods of notice apply.

Alternatives to Redundancy (3) • Please note that employees on lay-off or shorttime can claim for redundancy after a period of: – 4 consecutive weeks or – A series of at least 6 weeks within a 13 week period where not more than 3 were consecutive • Other Alternatives – Reduced Hours – Pay freeze – % Pay cuts

Thank you for your attention For further information, please contact: Clare Ferguson Managing Director HR Outsourcing, 3 Parnell Street, Waterford. www. hroutsourcing. ie Tel. 051 820101 Email: hr@hroutsourcing. ie