Managing redundancies is one of the most challenging responsibilities HR professionals and business leaders face, requiring a balance of empathy, legal compliance, and strategic foresight. In today’s rapidly evolving business landscape, where economic shifts and technological advancements can prompt sudden organisational changes, adopting a best-practice approach to redundancy management is more crucial than ever. This article explores the key principles and actionable strategies that help ensure redundancy processes are handled with fairness, transparency, and respect - safeguarding both departing employees and the long-term health of the organisation.
What type of redundancy process do we need to implement?
Identify how many redundancies will be required at this time (within this 30 day period)
A collective redundancy process is required if the number of impacted individuals is:
5 employees in establishments normally employing 21–49 employees
10 employees in establishments normally employing 50–99 employees
10% of employees in establishments normally employing 100–299 employees
30 employees in establishments normally employing 300 or more employees
The average number of employees over the 12 months preceding the first dismissal is used to determine the normal employment level
If less than the above, an individual redundancy process should be followed.
How should we approach collective redundancy process?
Consult with Employee Representatives, commencing at least 30 days before issuing redundancy notices and discussing possible alternatives
Notify the Minister for Enterprise, Trade and Employment by way of written notification at least 30 days before the first dismissal takes effect
How should we approach individual redundancy?
There is no statutory obligation to consult or notify as in collective redundancies, but best practice is always to act reasonably and fairly
No need to nominate or involve Employee Representatives
Meet impacted employees individually and confidentially to notify them of proposed restructuring and that their “role is at risk”. Here both the employee and employer can suggest alternatives to redundancy (e.g. redeployment opportunities)
This process should take a maximum of 2-3 weeks to complete
How do we identify the impacted individuals?
Identify the area of the business and roles that will be impacted, based on objective criteria (e.g. profitability of business area, expense of maintaining this business, etc.)
If there are several individuals working in this area, with only some roles being made redundant, voluntary redundancy can be offered initially
Develop objective criteria for forced redundancies e.g. implement a “last in, first out policy” or build a matrix of skills and experience for each potentially impacted individual
How do we calculate statutory and ex-gratia payments?
The minimum statutory redundancy entitlement is:
Two weeks' pay for each year of continuous and reckonable service, plus
One additional week's pay
A cap of €600 per week applies to the gross weekly pay, even if an employee's actual weekly earnings exceed this amount.
Ex gratia payments can be uncapped or capped at 1 year’s or 2years’ salary
Be aware that payments are bound by precedent
It is common to get some additional perks – outplacement, health insurance continued until end of payment period, move forward bonus payment
It is very common to provide pay in lieu of notice or gardening leave
Do all employees qualify for statutory redundancy?
No, an employee must:
Have at least 104 weeks (2 years) of continuous service
Be in employment that is fully insurable under the Social Welfare Acts, typically involving Class A PRSI contributions
Experience a job loss where the position no longer exists
What are the most common pitfalls?
Failure to identify collective redundancy process is required
Poor communication between employer and impacted/remaining employees
Not using appropriate objective criteria to identify impacted roles and individuals
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