Redundancies – An overview of Redundancies in Ireland

Redundancies – An overview of redundancies in Ireland

In Ireland, for a redundancy to be deemed fair, there are a number of criteria that need to be met. In the absence of these, the redundancy could be deemed unfair and an employee could make a claim for unfair dismissal/selection for redundancy and if successful, could win up to 2 years remuneration in a claim through the WRC (Work Relations Commission). To avoid this occurring, you will need to ensure all the correct steps are taken to guarantee a fair process is followed. We at Kala Management Solutions are redundancy specialists and can guide you with ease through this process in a stress free, and cost effective manner.

This article provides a brief overview of the most salient points to note when engaging in a redundancy process.

An employee is dismissed by reason of redundancy if the dismissal results wholly or mainly from the following:

  1. The employer has ceased, or intends to cease to carry out the business for the purposes for which the employee was employed
  2. The employer has ceased, or intends to cease to carry out the business in the place where the employee was so employed
  3. The requirements of the business for the employee to carry out work of a particular kind, in the place where the employee was employed have ceased or diminished or are expected to cease or diminish
  4. The employer has decided to carry out the business with fewer or no employees, whether by requiring the work for which the employee had been employed, should henceforth be done in a different manner for which the employee is not sufficiently qualified or trained
  5. The employer has decided that the work for which the employee had been employed should be henceforth be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.

There are a number of conditions that must be met for a person to be entitled to a redundancy payment.

  1. The employee must have worked under a contract of service or apprenticeship.
  2. The employee must have been in employment which was insurable for all benefits under the Social Welfare legislation or have ceased to be in such employment in the four years prior to the redundancy
  3. The employee must normally work at least 8-hours a week for the same employer and;
  4. The employee must have worked continuously for the employer for at least 104-weeks.

It is important to note that if an employee feels that he/she was not dismissed, wholly or mainly by reason of redundancy or was unfairly selected, the employee may bring a claim under the Unfair Dismissals Acts, 1977-1993. Irrespective of the presence of a written contract of employment, an oral contract exists and the employee is covered by the provisions of the Redundancy Payments Acts, 1967 – 2003.

Common grounds for redundancy are:

Need for fewer employees due to a fall in demand for products or services

  1. Fewer employees needed due to rationalisation in the company
  2. Fewer employees needed due to a closure of a section or department in the company
  3. The complete closure of the company

Unfair selection for redundancy

An employee may claim that he/she was unfairly selected for redundancy if:

  1. Employees engaged in similar work with the same employer were not dismissed or;
  2. If a dismissal occurred due to an employee’s membership of a trade union

At all times, it is important to ensure that:

  1. The employee is being dismissed by reason of redundancy and for no other reason;
  2. The circumstances constituting the redundancy have been applied equally to one or more other employees;
  3. That those other employees have been employed in employment similar to that of the employee and with the same employer;
  4. The selection of the dismissed employee must have resulted wholly or mainly from one or more of the grounds for unfair dismissal.

With regard to redundancies arising from a downturn in business, any claim brought against the employer under the Unfair Dismissals Acts, 1977-1993 will oblige the employer to present accounts, such as balance sheets etc., to substantiate the employer’s position of a downturn in business at the time of the redundancy.

Also, a claim of unfair dismissal is likely to succeed if an employee is made redundant and then the employer hires someone else to perform the same job as the dismissed employee.  It is imperative that the company ensure that in the first instance it has objective grounds for a redundancy, such as those mentioned earlier and that secondly that if a new employee is hired, that the qualifications, duties and responsibilities are substantially different to the dismissed employee’s.

For further details on how we can help you manage a redundacy process please contact us in confidence on or call (01) 619 02 82 – you can also visit here for further details on redundancy advice and support we offer clients –    Send article as PDF   

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