Dáil Éireann debate -
Wednesday, 21 Mar 2001

Vol. 533 No. 1

Written Answers. - Redundancy Payments.

Róisín Shortall

Question:

71 Ms Shortall asked the Tánaiste and Minister for Enterprise, Trade and Employment the reasons the improvements contained in the Redundancy Payments (Lump Sum) Regulations, 2001, are applied to workers who receive notice after 1 April instead of workers whose employment actually terminates after this date; if her attention has been drawn to the discrepancy this creates for long-standing workers in view of the fact that they must be given a longer period of notice, and hence lose out relative to shorter-term workers where the termination date is in April; if her attention has further been drawn to the fact that recent redundancies in a company (details supplied) are affected in such a manner; the plans she has to address this situation; and if she will make a statement on the matter. [8427/01]

Minister of State at the Department of Enterprise, Trade and Employment (Mr. T. Kitt)

The ceiling on weekly wages for calculating the amount of a statutory redundancy lump sum payment was raised under Statutory Instrument 41 of 2001. This is the first increase in the ceiling in just over six years. The purpose of the statutory instrument is to raise the ceiling on annual reckonable earnings to be taken into account in the calculation of a statutory redundancy lump sum payment from £15,600, £300 per week to £20,800, £400 per week from 1 April 2001. The critical date for determining whether the higher ceiling should apply in any particular case is the date on which notification of proposed dismissal by reason of redundancy is issued, that is, the date the employee is declared redundant.

Back in the early 1980s, the Department of Labour took the view that the higher ceiling should be applied from the date of termination of employment. However, this view was challenged in the High Court in the matter of The Minister for Labour (Plaintiff) v Nokia Limited and the Employment Appeals Tribunal (Defendants). In the ex tempore judgment delivered on 30 March 1983, the judge dismissed the Minister's appeal on the grounds that the lower ceiling should apply in the calculation of the statutory redundancy lump sum.

This meant that the date an employee is declared redundant is the date on which a notice of proposed dismissal is given to the employee in accordance with section 17 of the Redundancy Payments Act, 1967, that is, not later than two weeks before the date of dismissal.

Any disputes arising in relation to redundancy can be referred to the Employment Appeals Tribunal, which will make a decision in the matter.