Losing your job through redundancy can be one of the most stressful experiences in a professional’s life. The emotional and financial uncertainty can be overwhelming, making it crucial to understand your rights, options, and potential support systems. This comprehensive guide will provide you with an in-depth look at redundancy in Ireland, helping you navigate this challenging transition with confidence and clarity.
Redundancy is a specific type of job loss that occurs when an employee’s position becomes unnecessary due to external circumstances. Unlike termination for performance issues, redundancy is not a reflection of an individual’s work quality or capabilities.
Employers may initiate redundancy for various strategic reasons:
In Ireland, redundancy is governed by the Redundancy Payments Act of 1967, which provides clear guidelines and protections for employees. This legislation ensures that workers are treated fairly and receive appropriate compensation when their jobs are eliminated.
To qualify for statutory redundancy in Ireland, you must meet specific requirements:
The calculation of redundancy pay follows a standardised formula designed to provide fair compensation based on your service and earnings.
For instance, if you have been employed by a company for 16.15 years and earn €400 per week before tax deductions, your redundancy payment would be calculated as follows:
Service: 16.15 years (including maternity)
Weeks due: 33.3 weeks = [(16.15 x 2) + 1]
Wages: €400 per week Entitlements: €13,320
One of the most attractive aspects of redundancy in Ireland is the tax treatment of statutory payments.
While statutory redundancy is tax-free, be aware that:
Employers must follow strict, fair selection methods when determining redundancies:
Your employer should implement a fair and objective selection process when determining redundancies. This means the decision should be based on clear, unbiased, and factual criteria that explain why you were chosen for redundancy while other employees were not.
1. Last In, First Out (LIFO)
2. Voluntary Redundancy
3. Objective Points-Based System
* Work performance
* Attendance records
* Qualifications
* Skills relevance
Notice periods are structured based on years of service:
If you believe your redundancy is unfair:
Employers might explore alternatives before finalising redundancies:
Navigating redundancy requires strategic financial planning. Professional guidance can help you understand full entitlements, optimise financial strategy, explore investment opportunities, plan career transition and manage pension and long-term financial goals
At Fairstone, we specialise in providing comprehensive financial guidance during life’s most challenging transitions. Our expert advisors offer personalised redundancy consultations, comprehensive pension and investment strategy and a holistic financial planning tailored to your unique situation Book your no-obligation redundancy consultation with Fairstone today and transform uncertainty into opportunity.
Updated 10th February 2025
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