A detailed response was provided directly to Shannon Chamber last week.
In situations where an employer must make an employee redundant, it is the employer’s responsibility to pay statutory redundancy payments to eligible employees. However, if an employer cannot sustain the cost of redundancy payments due to financial difficulties or insolvency the State provides a safety net for both employers and employees. The Department of Social Protection can make the statutory redundancy payment to eligible employees from the Social Insurance Fund on behalf of the employer. The employer does not have to be insolvent for the Department of Social Protection to make these payments on their behalf.
When such a redundancy payment is made from the Social Insurance Fund, a debt is raised against the employer. The Department of Social Protection engages directly with the employer to ascertain their financial situation and their capacity to repay the debt. An agreed repayment plan can be put in place to minimise financial hardship.
The redundancy rebate scheme was abolished in 2013. The rebate to employers was paid regardless of a company’s financial situation and ability to pay, or ongoing commitment to the Irish economy, thus benefitting viable and profitable companies, including multinational companies. At the time the rebate was ceased it was not deemed a targeted use of resources. In contrast, the Redundancy Payments Scheme as it now operates benefits employees whose employers are unable to make statutory redundancy payments. The Scheme considers both an employer’s ability to pay and that the Social Insurance Fund can be reimbursed in the future, through debt repayment if an employer’s financial position improves. This is a more targeted use of funds.
Therefore, there are currently no plans for the reintroduction of the rebate scheme as per the previous model for all employers.