Case study: Redundancy payment and short-time working

Mary has worked for the same employer for the past 15 years. Two years ago she was put on a three-day week on the understanding that this was temporary and that full-time work would be resumed. She has now been told however that she is to be made redundant. Over the years she has never received a pay increase. How will her redundancy payment be calculated?

Answer

Mary would be entitled to two weeks' pay for each year of service plus one extra week's pay.
The present ceiling (since 1 January 2005) on earnings is €600 per week (previously €507 per week).

The payment would normally be calculated on her earnings at the time she is let go. She had been working full-time for 13 years however before being put on reduced working hours. That is, a three-day week. If she was made redundant within one year of being put on reduced hours, her redundancy payment would be based on her earnings for a full week.

In this case she is being made redundant having been on a three-day week for more than a year. How her payment will be calculated depends on whether she accepted being on reduced hours or not. If she fully accepted the reduced working hours as her normal week and never asked to return to full-time work, then her redundancy payment will be based on her gross pay for the reduced working hours.

If, on the other hand, she never accepted the reduced working hours as her normal hours and continually asked to be put back on full-time working, then it is clear she did not accept her reduced working hours as normal. In this situation, her redundancy payment should be calculated based on her full-time rate of pay.

If she had asked to be placed on reduced working hours for her own reasons and the employer agreed, then the redundancy entitlement would based on the reduced hours.

If she has a dispute about this with her employer she could make a claim to the Workplace Relations Commission using the online complaint form available on workplacerelations.ie.

Page edited: 10 November 2015