A Quick Guide to Redundancy for Employers

Last updated: October 23rd, 2023

Redundancy is hopefully something you’ll never have to worry about, but every business owner or manager should understand what it is, how it can occur and how to manage the process just in case – here’s a quick guide to help…

Redundancy generally occurs where a person loses their job due to circumstances such as the closure of the business or a reduction in the number of staff. The reason could be:

  • The financial position of the company
  • Lack of work
  • Reorganisation within the company
  • The company closing down completely

Actual redundancies in January 2009 were 6,588, compared to only 132 in January 2018 – a big reduction over the years.

As an alternative to redundancy, an employer may instead choose to lay staff off or put them on short time for a number of weeks.

Lay off and short time

Under the Redundancy Payments Acts 1967–2014, a lay-off situation arises where the employer is unable to provide work for staff, but believes this to be a temporary situation and gives staff notification of the lay off before the work finishes.

A short-time situation arises where, due to a reduction in the amount of work to be done, the weekly pay is less than half the normal weekly pay or the hours worked are reduced to less than half the normal weekly working hours. This must be a temporary situation and the employer must notify staff before the reduction starts.

Examples of redundancy scenarios

Redundancy can occur where one of the following things happen:

  • The employer ceases to carry on business or ceases to carry on business at the site where staff have been employed. For example, if the company moves location, this can be a substantial change in working conditions and may, therefore, be a reason for redundancy. However, if there’s a change of ownership under the transfer of undertaking legislation, where employees are re-employed with no change to their working conditions, then it is not a redundancy situation.
  • Where the employer’s requirements for employees in their category has ceased or diminished.
  • The employer has decided to carry on the business with fewer or no staff. In deciding this, close members of the employer’s family are not taken into account
  • The employer has decided to let the work be done in a different manner in future and staff are not sufficiently qualified or trained to do the work in the new way.
  • The employer has decided that work will in future be done by another person who can do other work as well, and existing staff are not sufficiently qualified or trained to do that other work.

Collective and voluntary redundancy

When a number of employees are being made redundant within a 30-day period this is known as a collective redundancy. Collective redundancy notifications should be made to the Minister for Employment Affairs and Social Protection.

Sometimes there’s a voluntary redundancy situation. This is when an employer needs to reduce the workforce and asks for some employees to volunteer for redundancy.

The Redundancy Payments Acts 1967–2014 provide a minimum entitlement to a redundancy payment for employees with a set period of service with the employer. Not all employees are entitled to this statutory redundancy payment, even where a redundancy situation exists.

However the employees and employer may agree on a redundancy payment above this statutory minimum and in such circumstances, employees who have not reached the statutory minimum period of service may also receive a payment.

If you have any questions in relation to redundancies please contact the advice line on 1890 253 369

Book a call with a consultant

Complete the form below and a consultant will call you as soon as possible.

Book a call with a consultant

Complete the form below and a consultant will call you as soon as possible.

Latest Resources

Seasonal workers: what employers should know

Seasonal workers
As the days get longer and the skies get sunnier (well, sometimes), summer is on people’s minds. This means that business owners, meanwhile, are starting […]

St Patrick’s Day: Have you prepared for absenteeism?

Published: March 20th 2024 Following national celebrations and public holidays like St Patrick’s day, you could find yourself down several staff members. And – as […]

What Employees Are Entitled to a Public Holiday Benefit & How Are Benefits Calculated?

public holiday
Published: March 20th 2024 From Easter Monday to St Patrick’s Day, Ireland gets ten public holidays and, with them, public holiday benefits. But what if […]

Olga Shevchenko

Director/Advocate, Immigration Advice Bureau

Olga Shevchenko specialises in immigration advocacy and consultancy, in particular, employment permit, visas, family reunification, citizenship, etc, for those seeking to visit, reside or invest in Ireland.

Olga provides extensive information, knowledge, and support to her clients, enabling access to positive solutions for people struggling to handle the immigration law.

Minister Neale Richmond

Minister of State, Department of Enterprise, Trade and Employment

Neale Richmond TD was appointed as Minister of State at the Department of Enterprise, Trade and Employment with special responsibility for Employment Affairs and Retail Business and the Department of Social Protection in January 2023.

Much of his work at the Department of Enterprise, Trade and Employment is with businesses, workers, their representative bodies and the State Agencies to ensure that the economic recovery and growth extends to all parts of the country. He works closely with the SME sector, including retail, on building resilience and on the transition to the green and digital economies.

Mark Carpenter

Director of Regulatory & Corporate Affairs, Sky

Mark Carpenter is Director of Regulatory & Corporate Affairs at Sky Ireland. In this role he has responsibility for External and Internal Communications, Public Policy and Regulatory Affairs and the company’s ‘Bigger Picture’ (CSR) programme. He also works closely with Sky Group teams on a variety of matters, in particular our partnerships with domestic broadcasters.

Prior to working at Sky, Mark worked as a Policy Officer in Houses of the Oireachtas and as a Management Consultant at Accenture. He has a BA in History from Oxford University and a PhD in Political Science from Trinity College Dublin.

Nora Cashe

Litigation and Compliance Manager, Peninsula

Nóra studied Law in Griffith College Dublin and qualified as a Barrister in 2008, practising in the area of Criminal law. She is also member of the Irish Employment Law Association.

Nora has extensive experience representing clients at Employment Tribunal hearings, Conciliation / Mediation meetings before both the Workplace Relations Commission and the Labour Court. 

Nóra is a member of the Irish Employment Law Association and engages with the WRC Adjudication Service as part of their stakeholder engagement forum.

Deiric McCann

Managing Director, Genos International Europe

Deiric McCann leads Genos International Europe – The EU division of a world-leading provider of emotional intelligence solutions. 

With over two decades experience at the highest levels of management, Deiric supports clients to develop the resilience, emotional intelligence, psychological safety and engagements of their employees.

Rhiannon Coyne

Senior HR Consultant, Graphite HRM

Rhiannon Coyne is a Senior HR Consultant at Graphite HRM and will be providing an overview of best practice on how to deal with complaints of bullying and harassment in the workplace. 

With a number of recent updates to employment laws, Rhiannon will take a closer look at employment equality and how it is interlinked to Health & Safety and what employers can learn from recent case laws.

David Begg

Chairman, Workplace Relations Commission

David Begg was appointed Chairperson of the Workplace Relations Commission (WRC) in January 2021.

David is also a professor at Maynooth University Institute of Social Sciences. Mr Begg’s extensive history in the trade union movement included leading the ESB Officers Association and Irish Congress of Trade Unions, stepping away from the latter in 2001 to chair international aid agency Concern.

David Begg was also previously a director of the Central Bank of Ireland between 1995 and 2010.