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Q.        What is Redundancy?

A.  A redundancy occurs where an employee’s job ceases to exist and the employee is not replaced.  This can happen in one of the following          situations:

a) Where the employer ceased or intends to cease carrying on business.

b) Where the employer has decided to carry on the business with fewer or no employees.

c) Where the employer has decided that the work for which the employee has been employed should be done in a different way for which the employee is not trained. 

d) Where the employer has decided that the work for which the employee was employed should be done by a person who can do other work for which the employee is not sufficiently qualified.

Q.        Who is entitled to Redundancy?

A.        An employee aged 16 or over with 104 weeks of continuous service with an employer is entitled to Statutory Redundancy payment. 

Q.        What is the Statutory Redundancy Entitlement?

A.        Statutory Redundancy payment is two weeks gross pay per year of service to a maximum of €600 per week, plus one week’s pay which is also subject to a maximum payment of €600.

Q.        Is this payment taxed?

A.        This payment is tax free.

Q.        What is an ex gratia payment?

A.        An ex gratia payment is a payment “over and above” the statutory payment.  There is generally no requirement to pay this unless it is set out in the contract of employment which is rare.  Bigger companies tend to offer ex gratia payment and it is usually linked to years of service eg. two weeks pay per year of service in addition to statutory pay.

Q.        Am I entitled to an ex gratia payment?

A.        An employer is not obliged to pay an ex gratia payment unless it is provided for in your contract of employment.  In other words an employer is not obliged to offer an ex gratia payment but may do so where the employer wants to reward the employee for loyal service or if they want to make the redundancy less painful for the employee.  If an employer decides to pay an ex gratia payment, it is normal for employers to get the employee to sign a Termination/Compromise/Settlement Agreement. 

Q.        What is a Termination/Compromise/Settlement Agreement?

A Termination Agreement sets out the redundancy arrangement between the employer and employee and confirms that the employee will not take any action against the employer in the future in respect of their employment or other statutory rights.  The terms of this agreement will be confidential and will be in full and final settlement of all issues between the employee and employer so it is important that the agreement entirely reflects what you have agreed.

Q.        I am not a Solicitor.  Will I get help with this Termination/Compromise/Settlement               Agreement?

A.        It is usual for the employer to agree to contribute to the cost of  the employee getting independent  legal advice from a solicitor in respect of the Termination/ Compromise/Settlement Agreement before signing.  Your solicitor is independent of your employer and is there to advise you of what your rights are should you not accept the proposal therefore it is important to go to an employment solicitor who can advise you of your rights.

Q.        Will I still receive my holiday pay?

A.        Yes. Annual leave is a separate statutory entitlement. 

Q.        Will I receive notice?

A.        The employer is obliged to give a minimum of two weeks’ notice of redundancy and the employer must still pay all contractual notice.

Q.        Will I still receive my bonus?

A.        Your bonus is payable in accordance with your contract and normally refers to the financial year so if the financial year is not complete then the bonus is strictly not payable.