1. Peter McInnes – McDowell Purcell Solicitors 26 May 2009
Redundancy
Peter McInnes – McDowell Purcell Solicitors 26 May 2009

2. Legislation Redundancy Payments Acts 1967-2007
Unfair Dismissals Act
Protection of Employment Act 1977
Protection of Employment (Exceptional Collective Redundancies and Related Matters) Act 2007

3. Redundancy Redundancy is a dismissal Must be a genuine redundancy
Must be fair selection

4. Genuine Redundancy
Section 7(2) of the Redundancy Payments Act 1967 (as amended) provides that a redundancy occurs where an employee is dismissed for one or more reasons not related to the employee concerned, and the dismissal is attributable wholly or mainly to the:
Cessation of the business in which the employee was employed
Cessation or reduction in need of the business for employees to carry out work of a particular kind in the place he was employed
Decision to carry on the business with fewer or no employees whether by requiring the work for which the employee had been employed to be done by other employees or otherwise
Decision to do work in a different manner for which the employee isn’t sufficiently qualified or trained
Decision that work should be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained

5. Genuine Redundancy Two important characteristics:
Change
Cessation of business
Reorganisation
Restructuring
Impersonality
Position not person
St Ledger v Frontline Distributors Ireland Limited [1995] ELR 160

6. Fair Selection
Must be reasonable both in terms of selection for redundancy and manner of dismissal
Consultation
2 stage process
Advice of risk of redundancy
Allow input from employee before final decision
Check for precedents e.g. collective agreements, custom and practice, redundancy procedure

7. Fair Selection Objective selection criteria Criteria might include
LIFO
Qualifications/training
Flexibility
Attendance (possible disability discrimination)
Performance (possible double penalty)
Selection matrices
Intrium Justitia v Kerrie McGarvey [ADE/08/22]
Document selection criteria
Consistency
Explore alternatives

8. Fair Selection O’ Kelly v XSIL Limited [UD 1086/2007]
Senior Engineer
No alternative positions
No discussion with employee
Unreasonable behaviour of employer in
Selection criteria
Manner of dismissal
Unfair selection: reinstated
Sheehan & O’ Brien v Vintners Federation of Ireland [EAT, 2008]
Genuine redundancy existed
No consideration given to reorganisation proposal
€43,000 compensation

9. Employees on Protective Leave
Notice of dismissal void
Includes maternity leave, adoptive leave, parental leave
Gleeson v L’Oreal (EAT, 2008) -confirmed that employers may keep employees on maternity leave informed of the process

10. Notice 2 weeks notice – Redundancy Payments Acts
Minimum Notice and Terms of Employment Acts
Contract of Employment
Reasonable notice
PILON, if provided for in the contract or otherwise by agreement

11. Redundancy Payments Statutory 104 weeks continuous employment
Two weeks per year of reckonable service
One additional week
Current cap €600 per week
60% rebate to employer

12. Redundancy Payments Ex Gratia
Payment in excess of statutory entitlement
No legal entitlement
Custom and practice
Can be tax free but subject to limits:
€10,160 plus €765 per year of service
Additional €10,000 if no previous claim in last 10 years and not a member of the employer’s occupational pension scheme
SCSB
Compromise agreement

13. Reckonable Service
After 10 April take account of absences from work over last 3 years
Reckonable service
Holiday leave
Sick leave (less than 26 consecutive weeks)
Maternity, carer’s, adoptive and parental leave
Periods of lock-out from employment
Non- reckonable service
Periods of absence over 52 consecutive weeks due to work related injury
Periods of absence over 26 consecutive weeks due to illness
Any period of lay-off
Any period on strike

14. Collective Redundancies
Protection of Employment Acts
In a period of 30 days
At least 5 in a workforce of between 20 and 50 employees
At least 10 in a workforce of between 50 and 100 employees
At least 10% of a total workforce numbering between 100 and 300 employees
At least 30 in a workforce normally employing 300 or more employees

15. Consultation & Notification
Consultation with employee representatives ‘with a view to reaching agreement’
Section 9(3) – consultation must be initiated at least 30 days before the first notice of dismissal is given
Written notification to Minister for Enterprise, Trade and Employment at least 30 days before the first notice of dismissal
Penalties
€5,000
€250,000

16. Information
The reasons for the proposed redundancies, the number, or descriptions, or categories of employees whom it is proposed to make redundant
The number of employees and description of categories normally employed
The period during which it is proposed to effect the proposed redundancies
The selection criteria
The method for calculating redundancy payments other than those set out in the relevant legislation

17. Exceptional Collective Redundancies
Protection of Employment (Exceptional Collective Redundancies and Related Matters) Act 2007
Irish Ferries dispute
Redundancy Panel
Purpose – to ensure collective redundancies are genuine
Unfair Dismissals Acts weeks remuneration
Criminal Sanction
Penalties

18. Injunctions Nolan v Emo Oil Services Ltd [2009] IEHC 15
Other avenues of redress
Unfair Dismissal
Wrongful Dismissal

19. Alternatives to Redundancy
Pay freezes
Pay cuts
Lay-off/short-time
Withholding bonus payments
Changing pension benefits
Career breaks
Unpaid leave e.g. one day per week
Redeployment

20. Pay Cuts Three options Notify employees of intention
Agree change with employees
Notify employees of intention
Engage in consultation
Obtain consent in writing
Impose a unilateral variation on the employee
Employee may claim for:
Constructive dismissal
Deduction of wages under Payment of Wages Act 1991
Breach of contract in the civil courts
Dismiss and re-engage the employee on different terms
This approach has not been tested in Ireland
Hollister v National Farmer’s Union (1979)

21. Lay-Off Section 11(1) Redundancy Payments Acts 1967 (as amended)
Where the employee’s services not required due to lack of work and there is a reasonable belief by the employer that the lack of work:
Will not be permanent
Notice to that effect is given to the employee

22. Short-Time Section 11(1) Redundancy Payments Acts 1967 (as amended)
Where for any week an employee’s remuneration is less than half, or his hours of work are less than half, of a normal working week and there is a reasonable belief by the employer that:
The diminution in work will not be permanent
Notice to that effect is given to the employee

23. Lay-off/short-time
An employee who has been laid off of kept on short-time for
4 consecutive weeks; or
Series of 6 or more weeks (of which not more than 3 were consecutive)
may claim a redundancy payment
The employee must serve written notice on their employer that they intend to claim redundancy by reason of lay-off or short-time
Employer may give counter notice within 7 days of the employee’s notice and the employer must offer not less than 13 unbroken weeks of employment starting within 4 weeks of the employee’s notice. The counter notice must state that the employer will contest the employee’s claim for redundancy

24. Thank You Peter McInnes – Partner McDowell Purcell Solicitors
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