Redundancy Payments Act 2003 (Commencement) Order 2003
Minister for Enterprise, Trade and Employment signed the above
Commencement Order which brought Sections 1 to 6, 8, 10 and 13 to 17 of
the Redundancy Payments Act, 2003 into operation on 25th May,
Section 10 provided for a new enhanced entitlement of
two weeks statutory redundancy payment for every year of service,
regardless of age, rather than the previous
half week between 16 and 41 and one week over 41. The bonus week and
employer 60% rebate continued.
Department of Enterprise, Trade and Employment outlines the scheme as
The Redundancy Payments Acts, 1967-2003 oblige employers by
law to pay redundant employees what is known as " statutory
redundancy entitlement". The amount is related to the
employee's length of service and normal weekly earnings
(gross weekly wage, average regular overtime and
payment-in-kind, all added together, up to a maximum wage at
of €600 per week regarding Notified Redundancies from 1st of
January 2005 onwards ).
A redundancy situation arises where an employee's job
ceases to exist, and the employee is not replaced for such
reasons as rationalisation/reorganisation, not enough work
available, the financial state of the firm, company closures
Exactly who is covered?
- An employee between the ages of 16 and 66 (Old Age
- with 104 weeks (two years) continuous service
- You must be in employment that is insurable under
the Social Welfare Acts. If you are a full-time employee
you must be in employment that is fully insurable for
all benefits under the Social Welfare Acts; this does
not apply if you are a part time employee. The
decide the question of
insurability in accordance with the rules and procedures
provided for in the Social Welfare Acts. An employee who
wishes to appeal such a decision is advised to contact
the Scope Section of that Department.
Employers who pay the statutory redundancy entitlement
and give proper notice of redundancy (at least two weeks)
are entitled to a 60% Rebate from the Social Insurance Fund,
into which they make regular payments themselves through
P.R.S.I. contributions. The Redundancy Payments Section of
the Department processes applications for these rebates -
What happens if an employer fails to pay a
redundancy lump sum?
Employers are obliged to make redundancy payments in
accordance with the statutory requirements laid down
under the Redundancy Payments Acts. In situations where
the employer is unable to pay the employees their
entitlements, the Department of Enterprise, Trade and
Employment pays the full amount direct to the employees
from the Social Insurance Fund (S.I.F.). The employee
RP50 and sends it into the Department (for useful
details on this procedure, see section on Redundancy
Forms below). The Department usually treats these
applications as a priority, and later seeks
reimbursement from the employer via its Redundancy
Calculation of Lump Sum.
- Two weeks pay for each year of employment continuous
and reckonable between the ages of 16 and 66 years
- in addition, a bonus week. All excess days should be
calculated as a portion of 365 days. i.e 4 years 190
days = 4.52 years
- Reckonable service is service EXCLUDING ordinary
sick leave over and above 26 weeks, occupational injury
over and above 52 weeks. All Breaks in Service should be
within the last three years prior to the Date of
Reckonable service also excludes absence from work
because of lay-offs or strikes. However, short-time work is
All calculations are subject to the ceiling referred to
above, which stands at €600 per week with respect to
Notified Redundancies from 1st of January 2005 [or €507.90
prior to that date.]
Please note that you can now check a calculation at the
Employment Appeals Tribunal
Disputes concerning redundancy payments can be submitted
which has the advantage of
providing a speedy, fair, inexpensive and informal means for
individuals to seek remedies for alleged infringements of
their statutory redundancy rights. The Tribunal also deals
with disputes under such other labour law areas as the
Minimum Notice and Terms of Employment Acts, 1973 to 2001.
These cover the right of workers to a minimum period of
notice before dismissal, provided they are in continuous
service with the same employer for at least 13 weeks and are
normally expected to work at least 8 hours per week.
The Tribunal also deals with the Unfair Dismissals Acts,
1977 to 1993 and the Protection of Employees (Employers'
Insolvency) Acts, 1984 to 2003 (dealing with such areas,
amongst others, as arrears of pay due to an employee,
holiday and sick pay etc.) where the employer is insolvent.
IMPORTANT: Please note -
- This Layperson's Guide does not purport to be a
legal document or to give a legal interpretation of the
Redundancy Payments Acts, 1967 to 2003 or of any other
Acts referred to.
- The Guide should be used as an Introduction to the
Department of Enterprise, Trade and Employment's more
detailed "" and not as an
alternative to it.