What is redundancy?
- When does redundancy happen?
- What counts as genuine redundancy?
- The difference between redundancy and dismissal
- Compulsory and non-compulsory redundancy
- Collective redundancies
- Lay off and short-time working
- Redundancy during sick leave, maternity leave and carer’s leave
- I think I was unfairly selected or there wasn’t a genuine redundancy situation
- The laws on redundancy
- More information
When does redundancy happen?
Where you lose your job because your employer is closing the business or reducing the number of staff, this is known as redundancy. It happens when your job in the company no longer exists, you are let go and are not replaced.
Redundancy is a last option
Your employer must consult with you before deciding to make you redundant. Redundancy is a last option and there must be valid economic, technical, or organisational grounds justifying changes in the workforce.
Before your employer makes you redundant, they might offer you another job in the business. This is known as ‘alternative work’.
What counts as genuine redundancy?
Your employer must be able to justify that there is genuine reason for making you redundant.
A genuine redundancy is one where your employer has a real business reason to make you redundant.
Reasons for redundancy include:
- Financial difficulties within the business: for example, your employer needs to cut costs and this means staff numbers must be reduced.
- Lack of work: for example, your employer no longer needs or has a reduced need for employees with your skills or new technology has made your job unnecessary.
- Reorganisation within the business: for example, your employer has decided to carry on the business with fewer or no staff or the job you do no longer exists.
- Business closure: the business is closing down or moving.
The difference between redundancy and dismissal
Redundancy is dismissal from your job, caused by your employer needing to reduce the workforce resulting in your job no longer existing.
The burden of proof is on your employer to show that a legitimate redundancy situation exists and that therefore the dismissal is fair.
For the dismissal to be fair, your employer must also show that you were fairly selected for redundancy and that fair procedures were followed.
If you do not agree that the dismissal is fair, you need to show one or more of the following:
- That there is no economic justification for the redundancy
- The reasons you have been given for redundancy are not genuine
- You have been replaced
- Fair procedures have not been followed
- You were unfairly selected for redundancy (for example because of your age or race)
Dismissal for other reasons
Your employer must have reasons that justify your dismissal. You may be dismissed from your job for one of the following reasons:
If you don’t think that your employer’s reasons are justified, you can bring a claim for unfair dismissal.
Compulsory and non-compulsory redundancy
Before an employer formally goes through the redundancy procedure required by legislation (compulsory redundancy), they can decide to offer a package to encourage employees to volunteer to leave their roles.
This is sometimes known as non-compulsory redundancy. It is used to avoid the compulsory redundancy process altogether or to reduce the numbers of employees who will ultimately have to be made compulsorily redundant.
Compulsory redundancy is where your employer needs to reduce the workforce and decides to make redundancies. The employer identifies which employees will be made redundant but must make sure they use fair selection criteria.
Non-compulsory redundancy can be through voluntary redundancy or early retirement.
This is where your employer needs to reduce the workforce and asks employees if they would like to volunteer for redundancy.
There must be a fair and transparent selection process. You may not automatically be selected just because you applied.
This is where your employer offers incentives to retire early. You are typically allowed to start receiving some pension payments earlier than you would have in a normal retirement situation. It can be used as an alternative to voluntary redundancy.
You may be part of a collective redundancy if your employer is making a certain number of employees redundant during any period of 30 consecutive days.
It is a collective redundancy where there is:
- 5 employees made redundant out of a workforce of 21 to 49 employees
- 10 employees made redundant out of a workforce of 50 to 99 employees
- 10% of employees made redundant out of a workforce of 100 to 299 employees
- 30 employees made redundant out of a workforce of 300 employees
Rules on collective redundancies
Your employer must follow certain rules if there is a collective redundancy situation.
Requirement to consult
Your employer must enter into consultations with a view to agreement with your representative. These consultations must take place as soon as possible and at least 30 days before the notice of redundancy is given. The aim of the consultation is to consider whether there are any alternatives to the redundancies.
These rules are set out in the Protection of Employment Acts 1977-2014.
The Employees (Provision of Information and Consultation) Act 2006 also requires employers to consult with employees on substantial changes in the workplace, including proposals for collective redundancies. The Act applies to employers of 50 people or more.
Information your employer must provide
Your employer must provide the following information in writing to your representatives:
- The reasons for the redundancy
- The number and descriptions of the employees affected
- The number and descriptions of employees normally employed
- The period in which the redundancies will happen
- The criteria for selection of employees for redundancy
- The method of calculating any redundancy payment
Your employer must also inform the Minister for Enterprise, Trade and Employment in writing of the proposed redundancies at least 30 days before the occurrence of the first redundancy. SI 140/1977 sets out the information your employer must provide to the Minister.
Lay off and short-time working
If there is a lack of work available or changes to the financial circumstances of the business, your employer may lay you off or reduce your working hours (put you on short-time) for a number of weeks.
A lay-off is when your employer tells you that they expect you to have no work for a temporary period and you will not be paid.
Short-time working is when your hours and pay are reduced due to a decrease in work.
In some cases when you have been in a lay off or short-time working situation for a certain length of time you may be entitled to claim redundancy.
Redundancy during sick leave, maternity leave and carer’s leave
You are made redundant on sick leave
If your employer decides to make you redundant while you are on sick leave, you may be able to bring a claim for unfair dismissal.
Unless your employer can prove there was a genuine redundancy situation and that fair procedures were followed, your dismissal may be found to be unfair.
Even if a genuine redundancy situation exists, you may bring a claim for unfair dismissal if you think that you were unfairly selected for redundancy. Your employer should apply selection criteria that are reasonable and are applied in a fair way.
You are made redundant on maternity leave
You cannot be made redundant while on maternity leave or additional maternity leave. You may be made redundant when you return to work or while you are pregnant before you go on maternity leave.
If you are selected for redundancy because you are pregnant, you may be able to bring a claim for unfair dismissal. Selection for redundancy based on certain grounds such as pregnancy is considered unfair under the unfair dismissals legislation.
You are made redundant on carer’s leave
If you are dismissed on grounds of redundancy, while on carer’s leave, under the Carer’s Leave Act 2001 it would be considered unfair dismissal.
If your employer does not allow you to return to work at the end of your carer’s leave you may be able to bring a claim under the unfair dismissals legislation. However you may be made redundant after you have returned to work.
I think I was unfairly selected or there wasn’t a genuine redundancy situation
If you feel that your employer has selected you unfairly, or that there was no genuine redundancy situation, you can bring a claim for unfair dismissal.
You think you were unfairly selected
Your employer should use fair and reasonable selection criteria in choosing people to make redundant.
Examples where your selection could be unfair include:
- Where the custom and practice in your workplace has been last in, first out and your selection did not follow this procedure
- Where your employment contract sets out criteria for selection which were not followed
Your redundancy is unfair if your employer has discriminated in selecting you for redundancy. For example if they make you redundant because you’re pregnant or on maternity leave.
Your employer could also have chosen you for an unfair reason. Unfair reasons include making you redundant because you’ve asked for one of your legal rights, made a health and safety complaint or been on an official strike.
You think there was no genuine redundancy situation
A genuine redundancy is one where your employer has a real business reason to make you redundant.
Signs your redundancy might not be a genuine include:
- Your employer has recently hired new employees to do similar work
- You have a bad relationship with your employer or other people at work
- You are singled out or treated differently from other people at work
The laws on redundancy
The laws on redundancy are set out in the Redundancy Payments Acts 1967–2014.
The requirements to consult on collective redundancies are set out in the Protection of Employment Acts 1977-2014 and the Employees (Provision of Information and Consultation) Act 2006.
You can get more information about your employment rights from the WRC. You can contact their Information and Customer service – see below.