Redundancy Services

REDUNDANCY RELATED QUESTIONS

1. Do you have too many employees for your current pipeline?

If, like many organisations you find that you hired employees based on a healthier pipeline in previous years, you are probably wondering what options are open to you. Having invested in employees’ recruitment, training and welfare, it’s important to know that making employees redundant is not the only way to resolve this issue.

In considering your options you need to review:

• Is this a long or short term problem?
• Can systems do the work as efficiently and more cost-effectively?
• How immediate is this requirement?

If you need to reduce your headcount you have 3 options available to you:

• Redundancy
• Lay-off
• Short time

Redundancy
A redundancy usually occurs where n a position is no longer required in an organisation, the employee(s) is dismissed and the position is not replaced.

Statutory definition of Lay-off
Lay-off is defined as a cessation of an employment by reason of the employer being unable to provide the work for which the employee was recruited and the employer has reason to believe that cessation will not be permanent. The employer must give notice to that effect to the employee prior to the layoff. RP9 form must be used for this purpose.

Statutory definition of Short-time
Short-time is defined as a reduction in the work provided for an employee by the employer so that the employee’s remuneration for any week is less than one half of normal weekly remuneration or the employee’s hours of work are less than half of normal weekly hours. The employer must give notice to the employee to that effect prior to the reduction in hours.

2. How much notice do I need to give employees?

This varies depending on whether you are making an employee redundant, or putting them on layoff or short-time hours.

Redundancy Notice
This is governed by 2 pieces of legislation and the employee’s contract of employment.

• The Redundancy Payments Acts 1967 – 2001 an employee who is being dismissed for redundancy reasons must be given at least two weeks’ notice in writing before the proposed date of dismissal, depending on their length of service.
• Employers must also comply with the notice requirements under the Minimum Notice and Terms of Employment Acts 1973 – 2001. See table below.

Service	Notice Due
Up to 2 years	1 Week
2-5 years	2 Weeks
5-10 years	4 Weeks
10-15 years	6 Weeks
15 years plus	8 Weeks

• Employee’s contract of employment – in particular clauses which specifically refer to notice periods, termination, redundancy or layoff/ short-time.

Short-time/ Lay off Notice
Once again, please check the employee’s contract of employment for clauses such as

• layoff/ short-time,
• Changes to terms and conditions of employment

You will need to ensure you comply with the terms of the contract, otherwise give as much notice as possible.

3. Is there a difference between “Redundancy” and “Statutory Redundancy”?

An employee must have 104 weeks continuous service in order to be entitled to Statutory Redundancy. This means that the terms of the Redundancy Payments Acts, 1967-2003, will apply, and the employee is entitled to 2 weeks pay per year of service plus a bonus week. Under the Act, this payment may be capped at €600 per week of service.

How can we help you?

Deciding to down-size a company is a difficult decision in an already stressful time. Management Teams who use Outplacement Professionals experience less stress than those who do not. Not only are we a trusted advisor during a stressful time, we can also help you:

• Decide the right course of action
• Choose positions which will be made redundant
• Communicate with your employees
• Complete the paperwork
• Help those losing their jobs to remain positive and prepare for next steps
• Maintain the goodwill of those leaving
• Motivate employees who are staying with you
• Avoid legal pit falls associated with dismissal

How do I tell my employees there’ll be no salary increases this year?

Firstly, check your contracts of employment to check what commitment is contained therein with regard to salary reviews and increases. Next, check if there is a Union Agreement or Collective Agreement on pay. The terms of each will determine how easy your decision will be, and whether consultation/agreement needs to be sought from employees.

In preparing your statement to your employee(s) make sure your message is clear, and is consistently communicated by your managers. Finally, consider whether there is anything you could do to sweeten the message? For example, could you give an extra day’s annual leave to employees; introduce a performance bonus. The crucial part is to ensure that you make commitment you can keep.

Can I reduce an employee’s salary?

Under the terms of the Payment of Wages Act you cannot reduce pay or benefits without agreement from the employee(s) in question. If you put an employee on short-time or reduce their hours, you may reduce their salary and benefits pro-rata.

I have a lot of tough decisions to make; how can I avoid losing face with my employees?

Firstly, you are not alone! Many businesses in all sectors are concerned with employee motivation and how to make tough decisions without losing the respect of those affected. The best advice is to consider your options carefully before acting; be open with your employees, and be consistent in your messages.

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For more information please contact us:
T: +353 (0) 1 892 8019 | E: [email protected]