Redundancy and Alternatives to Redundancy Clare Ferguson H. R 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, Short-time 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 short-time 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