Statutory Redundancy
Under the Redundancy Payments Acts of 1967 - 2007 employers must, by law, pay compensation to employees dismissed for reasons of redundancy. To be eligible for a payment under the Redundancy Payments Acts, the employee must satisfy the following requirements:
- Be aged over 16 years of age
- Be in employment that is insurable for all benefits under the social welfare system (PRSI Class "A")
- Have worked continuously for the employer for at least 104 weeks
- Have been in continuous employment for more that two years if a part-time worker
The same rules applies to apprentices. Apprentices qualify for redundancy unless let go within one month of completing an apprenticeship
Useful Publications / Services
- A Guide to the Redundancy Payments Scheme available from the National Employment Rights Authority (NERA)
- A redundancy calculator made available from the Department of Jobs, Enterprise, and Innovation
Calculating Statutory Redundancy
An eligible employee is entitled to two weeks statutory redundancy payment for every year of service, plus a bonus week. A week's payment is subject to a maximum ceiling called a statutory ceiling. The ceiling currently stands at €600 per week
- All statutory redundancy payments are tax-free
Example
Mary is aged 45 and is being made redundant. She has worked for her employer for 10 complete years. Her statutory redundancy payment will be calculated as follows:
- Two week's pay x 10 (the amount of years of service) = 20 weeks
- Plus one week's bonus pay
Total Statutory Redundancy Entitlement = 21 weeks pay
