Notice and redundancy

Guidance on notice and redundancy in the Republic of Ireland.

Under the terms of the Minimum Notice and Terms of Employment Acts, 1973-2001 [Minimum Notice and Terms of Employment Act, 1973], an employee or employer who intends to terminate a contract of employment must provide the other party with specified minimum notice.

Employees who have been in continuous employment for at least 13 weeks are obliged to provide their employer with one week's notice of termination of employment. If a greater amount of notice is specified in the employee's contract of employment, then this notice must be given.

Employers must give employees, who have been in continuous service, notice dependent on the length of the employee's service, as follows:

Required Notice

Continuous Service

An employee's service is considered 'continuous' unless he/she is either dismissed or voluntarily leaves his/her job. Continuity of service is not normally affected by strikes, lay-offs or lock-outs, nor by dismissal followed by immediate re-employment. The transfer of a trade or business from one person to another (a Transfer of Undertakings) does not break continuity of service, and in such cases an employee's service with the new owner includes service with the previous owner.

However, for the purpose of these Acts, an employee who claims and receives redundancy payment in respect of lay-off or short-time is considered to have left his/her employment voluntarily.

Calculation of Service

Periods of absence from the employment due to service with the Reserve Defence Forces are deemed to be periods of service. Absence of up to 26 weeks between consecutive periods of employment count as periods of service if due to lay-offs, sickness or injury, or when taken by agreement with the employer.

A week, or part of a week, when an employee was locked out by his/her employer, or when the employee was absent from work due to a trade dispute in another business, also counts when calculating periods of service. However, any period during which the employee has been absent from work because he/she was taking part in a strike relating to the business in which the employee is employed does not count.

Waiving Right to Notice or Accepting Pay in Lieu

Any provision in a contract of employment for shorter periods of notice than the minimum periods stipulated in the Acts has no effect. The Acts do not, however, prevent an employer or employee from waiving his/her right to notice or accepting payment in lieu of notice. If the employer does not require the employee to work out any part of their notice, the employer is obliged to pay the employee for that period.

Misconduct

The Acts do not affect the right of an employer or an employee to terminate a contract of employment without notice due to the misconduct of the other party.

Redundancy

Redundancy occurs where an employee's position ceases to exist and the employee is not replaced. Any employee aged 16 or over with 104 weeks' continuous service with an employer is entitled to a statutory redundancy payment in this situation.

An employee who has received a 'Notice of Proposed Dismissal for Redundancy (Form RP50 (Part A))' may decide to leave the employment earlier than the date of redundancy notified to him/her, for example to take up an offer of alternative employment. If he/she decides to leave, there is a risk that he/she may lose any entitlement to redundancy payments unless they notify their employer in writing using Form RP6 – Leaving Before Redundancy Notice Expires.

An employer has discretion as to whether to grant such a request or not. It should be noted that leaving during the notice period without the employer's agreement may affect a person's entitlement to a redundancy payment.

If you have been laid off or on short-time working for 4 weeks or more, you may give your employer notice of your intention to claim a redundancy payment on Form RP9 – Lay Off and Short Term Procedures.

If an employer has not paid the employee her/his redundancy lump sum, s/he should apply to the employer for it using form RP77 – Claim by an Employee against an Employer for a Lump Sum or Part of a Lump Sum. If your employer still refuses to pay it, you can apply to the Department of Employment Affairs and Social Protection for direct payment from the Social Insurance Fund.

The statutory redundancy payment is two week's gross pay per year of service up to a ceiling of €600 per week plus one week's pay, which is also subject to the ceiling of €600. This payment is tax-free. For information on how to calculate your entitlements please go to the redundancy calculator from the Department of Social Protection. Some employers may make redundancy agreements above the statutory rate.

Collective Redundancies

The Protection of Employment Acts, 1977 – 2014 make it mandatory for employers proposing a collective redundancy:

1. to engage in an information and consultation process with employees' representatives and
2. to notify the Minister for Enterprise, Trade and Employment of the proposed collective redundancy.

An employer is prohibited from issuing any notice of redundancy during the mandatory employee information and consultation period (required by the Protection of Employment Act 1977 (Consolidated version)) and until 30 days have elapsed from the date on which the Minister has been notified. An attempt to effect collective redundancies in that period will be an offence and render the employer liable to a fine of €3,000, unless the employer can show substantial business reasons for non-compliance, e.g. bankruptcy, insolvency or court order.

For the avoidance of doubt, the 30-day mandatory information and consultation process and the aforementioned 30-day period from the date of notification to the Minister may run concurrently.

However, since it will not be possible to complete the notification to the Minister until the identity of the employees' representatives for the purpose of the information and consultation process has been established, it is conceivable that both periods may not be entirely concurrent in situations where the employer does not ordinarily engage in collective bargaining, does not have an employee representative forum and delays in facilitating the selection/election of employee representatives for the purposes of complying with the provisions of the Acts.

What constitutes a Collective redundancy?

'Collective redundancy' is the making redundant within a period of 30 consecutive days, of a minimum number of employees, that minimum varying with the normal size of the establishment's workforce. The relevant minimum number of proposed redundancies vis-à-vis the size of the overall workforce is as follows:

• 5 employees in an establishment employing 21-49 employees
• 10 employees in an establishment normally employing 50-99 employees
• 10% of employees in an establishment normally employing 100-299 employees, or
• 30 employees in an establishment normally employing 300 or more employees

In computing the number employed in an establishment, look at the average number employed in each of the 12 months preceding the date on which the first dismissal takes effect.

What are the obligations to enter consultation with employees?

Section 9 of the 1977 Act requires employers to engage in a consultation process with the relevant employee representatives, 'with a view to reaching an agreement'. Similar wording in the equivalent UK legislation has been judicially interpreted as requiring the employer to allow the employee representatives adequate opportunity to consider the employer's proposals and the information given under the various headings outlined above, and to make constructive proposals in response thereto.

The employer's obligation in this regard does not extend beyond giving the representatives reasonable opportunity to revert with their proposals having had an opportunity to consider the employer's initial proposals.

"The essential point to my mind is that the consultation must be one where if they wish to do so workers' representatives can make constructive proposals and have time in which to do so." (Blackburne J in Griffin v South West Water Services Ltd [1995] IRLR 15)

Information and consultation process with employees' representatives

There must be an information and consultation process with employees' representatives commencing not later than 30 days before any individual notice of dismissal is issued.

The consultation with the employee representatives and the notification period for the Minister can run concurrently. It is an offence for an employer to issue notice of redundancy to any employees during the 30 day period of consultation with employee representatives. An employer found guilty on indictment shall be liable to a maximum fine of €250,000.

'Employees' Representatives' are defined as:

• A trade union, staff association or excepted body with which it has been the practice of the employer to conduct collective bargaining negotiations, or
• In the absence of such a trade union, staff association or excepted body, a person or persons chosen (under an arrangement put in place by the employer) by such employees from amongst their number to represent them in negotiations with the employer.

In the course of the information and consultation process, the employer is expected to provide the following information in writing to the employees' representatives:

1. Reasons for the proposed redundancies
2. Number, and description or categories, of employees whom it is proposed to make redundant
3. Number, and description or categories, of employees normally employed
4. The period over which it is proposed to implement the redundancies
5. The criteria for the selection of workers to be made redundant
6. If there is to be a payment other than the statutory redundancy payment, the method of calculating such payment must be set out.

Copies of all information in relation to the above, supplied to the employees' representatives, must be sent to the Minister 'as soon as possible'.

No Individual notice of redundancy may issue until at least 30 days after notification of the proposed redundancy has been received by the Minister. Notification should be sent by registered post or by hand. Notification should include the following:

• Name/address of the employer, stating whether employer is a company, partnership or sole trader
• Address of the establishment where the collective redundancies are proposed
• Total number of persons normally employed there
• The number/categories of employees whom it is proposed to make redundant
• The period over which it is proposed to implement the collective redundancies
• The reasons for the proposed collective redundancies
• Names/addresses of the trade unions/staff associations representing employees affected by the proposed redundancies
• Details of the consultations with each trade union (commencement date; progress made etc.)

Records should be kept by an employer for 3 years. The Minister may initiate a prosecution for an offence within one year of the date of an alleged offence under the Act.

The Protection of Employment (Exceptional Collective Redundancies) Act, 2007 provides for the insertion of a new Section 16(2) into the Protection of Employment Act, 1977 to give effect to a judgement of the European Court of Justice (Junk v Kuhnel – Case C-188/03). The new subsection makes it an offence for an employer to issue notice of redundancy to any employees during the 30 day period of consultation with employees representatives provided for in Section 9(3) of the 1977 Act. An employer found guilty on indictment of a breach of Section 16(2) shall be liable to a maximum fine of €250,000.

The Act applies to all persons in employment in an establishment normally employing more than 20 persons.

The Protection of Employment (Exceptional Collective Redundancies) Act, 2007 does not apply to:

• Employees engaged under a contract for a fixed term or for a specified purpose except where the collective redundancies are effected before the completion of such term or purpose
• State employees other than designated industrial grades
• Local Authority officers
• Seamen.

Dismissal

In general, the Unfair Dismissals Acts, 1977 – 2007, provide that every dismissal of an employee will be presumed to have been unfair unless the employer can show substantial grounds justifying the dismissal.

The purpose of the Acts is to protect employees from being unfairly dismissed from their jobs by laying down criteria by which dismissals are to be judged unfair and by providing an adjudication system and redress for an employee whose dismissal has been found to be unfair.

Unfair Dismissal

The Acts apply to employees over the age of 16 years with at least 12 months continuous service, with the exception of:

1. Close relatives of the employer who are living in the same household
2. Members of An Garda Síochána and the Defence Forces
3. Statutory apprentices dismissed in the month following the end of their apprenticeship (s.4 Unfair Dismissals Act,1977).

Cases where one year's continuous service does not apply:

The requirement of one year's continuous service does not apply where the dismissal results from:

1. an employee's pregnancy, giving birth or breastfeeding or any matters connected therewith
2. the exercise or proposed exercise by an employee of a right under the Maternity Protection Act, 1994 & 2004
3. the exercise or contemplated exercise by an employee of the rights to adoptive leave, or additional adoptive leave under the Adoptive Leave Act 1995 & 2005
4. the exercise or proposed exercise by the employee of the right to parental leave, parent's leave or force majeure leave under and in accordance with the Parental Leave Act, 1998, 2006 & 2019, and the Parent's Leave and Benefit Act 2019
5. an employee's entitlements, future entitlements, exercise or proposed exercise of rights under the National Minimum Wage Act 2000
6. an employee's trade union membership or activities
7. the exercise or proposed exercise by the employee of the right to carer's leave under and in accordance with the Carer's Leave Act, 2001
8. an employee employed under a statutory apprenticeship and the dismissal takes place after 6 months of the start date of the apprenticeship, but not in the month following the end of the apprenticeship.

The Acts provide for a number of grounds under which a dismissal may be considered unfair:

• Membership or proposed membership of a trade union or engaging in trade union activities, whether within permitted times during work or outside of working hours
• Religious or political opinions
• Legal proceedings against an employer where an employee is a party or a witness
• Race, colour, sexual orientation, age, or membership of the Traveller community
• Pregnancy, giving birth or breastfeeding or any matters connected with pregnancy or birth
• Availing of rights under legislation to maternity leave, adoptive leave, carer's leave, parental or force majeure leave
• Unfair selection for redundancy

Constructive Dismissal

Constructive dismissal arises where you terminate your contract of employment, with or without prior notice, due to the conduct of your employer. Your employer's conduct however, must have been such that it would have been reasonable for you to terminate your contract without giving notice.

If you are dismissed you may, under certain conditions, bring a claim for unfair dismissal against your employer. If you do this and your employer accepts that there was a dismissal, it will be for your employer to show that there were fair grounds for the dismissal. Generally a dismissal is presumed to be unfair unless your employer can show substantial grounds to justify it.

Insolvency

An employer is insolvent for the purposes of the Insolvency Payments Scheme if:

• The business is in liquidation
• The business is in receivership
• The employer is legally bankrupt
• The employer has died and the estate is being administered under the relevant legislation

The Insolvency Payment Scheme, operated by the Department of Employment Affairs and Social Protection, provides for the payment of certain outstanding entitlements to employees where their employment has ceased as a result of the insolvency of their employer. The Scheme also applies to employees working in Ireland where an employer becomes insolvent under the laws of another EU State.

Apart from arrears of pay, holiday pay and pay in lieu of statutory notice, the Scheme covers a wide range of entitlements that might be owed to employees by the employer, including awards made to them under employment rights legislation covering such issues as unfair dismissal, discrimination, working time and the minimum wage.

Certain unpaid pension scheme and personal retirement savings account (PRSA) contributions are also covered.