FACTSHEET: Collective redundancy explained

After a challenging year for certain sectors, many organisations are facing the difficult prospect of reorganising their workforces.

For any organisation that is forced to make multiple redundancies, it’s important to check if the reduction in headcount amounts to a collective redundancy.

A collective redundancy has a number of specific technical elements, so we’ve put together this factsheet to provide you with a broad overview.

What is a collective redundancy?

A collective redundancy involves the dismissal for redundancy reasons over any period of 30 consecutive days of at least:

  • Five employees in a workplace normally employing more than 21 and less than 49 employees.
  • 10 employees in a workplace normally employing between 50-99 employees.
  • 10% of the number of employees in a workplace normally employing between 100-299 employees.
  • 30 employees in a workplace normally employing 300 or more employees.

What are the consultation requirements?

If you’re making collective redundancies, you must hold consultations with employee representatives. Consultation must take place no later than 30 days before the first notice of redundancy is issued.

If you fail to complete the consultation procedure correctly, you could be found guilty of an offence and liable on summary conviction to a fine not exceeding €5,000.

What information must be provided to employee representatives?

You must provide employee representatives with all relevant information concerning the proposed collective redundancies in writing.

This information includes:

  • The reasons for the proposed redundancies.
  • The number, description, or categories of employees proposed for redundancy.
  • The number and description of employees normally employed.
  • The period during which it is proposed to effect the proposed redundancies.
  • The method of calculating any redundancy payments other than those methods set out in the Redundancy Payments Acts or any other relevant enactment.

When does the employer notify the State?

If you’re making collective redundancies, you must also notify the Minister for Social Protection in writing of the proposed collective redundancies at the soonest possible time and no later than 30 days before you issue the first notice of redundancy. A copy of the notification sent to the Minister must be given to the employee representatives as soon as possible.

What are timing requirements of collective redundancies?

You must not issue any notices of redundancy in a collective redundancy situation unless 30 days have passed since the Minister and the employee representatives were made aware of the proposed redundancies and the consultation process has taken place. If you don’t comply with these timing requirements and issue a notice of redundancy before the 30 days have expired, you could be found guilty of an offence and liable on conviction on indictment to a fine of up to €250,000.

What records do employers need to keep?

You must keep any records relating to the collective redundancies to demonstrate that your business complied with the law on collective redundancies. All such records must be kept for a period of at least three years. Failure to maintain appropriate records could lead to serious consequences. If you’re found guilty of this offence, you will be liable on summary conviction to a fine of up to €5,000.

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For advice on any HR issue, whether that’s collective redundancy or updating essential employment contracts and policies, speak to an expert now on 01 886 0350 or request a callback here.

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