Waiting for redundancy?

Where you lose your job due to circumstances such as the closure of the business or a reduction in the number of staff this is known as redundancy.

Statutory redundancy only applies to employees with two years' service. However, an employer might agree to pay a lump sum to employees with less than two years' service. This payment arises through agreement and not through a statutory entitlement. As so often in employment law, the legislation is concerned with ensuring minimum rights, while allowing the parties to agree more substantial rights.

The statutory redundancy payment is a lump-sum payment based on the pay of the employee. All eligible employees are entitled to:

• Two weeks' pay for every year of service over the age of 16 and
• One further week's pay

The amount of statutory redundancy is subject to a maximum earnings limit of €600 per week (€31,200 per year).

Pay refers to your current normal weekly pay including average regular overtime and benefits-in-kind, but before tax and PRSI deductions, that is your gross pay.
The statutory redundancy payment is tax-free.

All redundancies notified after 10 April 2005 take account of absences from work only over the last 3 years of service. Any absences outside of the three-year period ending on the date of termination of employment are disregarded.