Redundancies and Short-Time

Over the past few months we have, unfortunately, had a record number of enquiries about Redundancies and Short-time. Redundancy is 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. Many employers are now putting full time staff on shorter hours in their efforts to lessen the impact of a slowdown in business for their staff.

The state jobs agency FAS says that the rise in part-time workers “possibly indicates that some employers are using part-time work as an interim measure to either avoid or postpone redundancies”.

Part-time employment now accounts for more than 1 in 5 jobs in the Irish labour market. According to FAS, “males have been the worst affected by the rise in unemployment, primarily due to their high representation in the construction sector. There are now more than twice as many men as women on the Live Register, with the ‘gender gap’ increasing by over 100,000 over the last two years.”

Jobseekers this year tend to be manual and clerical workers with mangers and professional/technical workers increasing too. New apprentices entering the workforce has fallen by 63% in the first half of 2009.

If redundancy is inevitable, 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. The National Employment Rights Authority (NERA) website at www.employmentrights.ie provides a useful on-line redundancy calculator.

Employers can claim 60% of the statutory redundancy payment back from the Social Insurance Fund provided they have given the employees the proper notice on Form RP50 Part A, and submitting the Form RP50 to the Department of Enterprise, Trade and Employment.

It is important to establish the amount of notice the employee is entitled to. This is determined by the Minimum Notice and Terms of Employment Acts or the contract of employment, whichever is the longer. An employee may be able to claim redundancy without being dismissed if they are put on “short-term” for at least four weeks.

Short time means that they are earning less than half their normal weekly amount due to lack of work available. If the employee is informed that they are temporarily on short time they can claim redundancy after four consecutive weeks or six broken weeks in a thirteen week period. If the employee is informed that there is temporarily no work for four weeks, and is “laid off”, Form RP9 should be completed for the employee to claim redundancy.