Dáil Éireann Debate, Monday - 9 September 2024
464. Deputy Ged Nash asked the Minister for Enterprise, Trade and Employment if he is aware that the €600-per-week cap on statutory redundancy payments has not been reviewed or revised upwards in almost 20 years; if he will review it upwards this year to the average weekly industrial wage; if he will then commit to a process of benchmarking the rate against wage growth on an annual basis; and if he will make a statement on the matter. [34323/24]
View answerThe Redundancy Payments Act 1967 sets out the formula for calculating the minimum redundancy payment which must be made to eligible employees when they are made redundant by their employer. This is referred to as “statutory redundancy”, and it is a lump sum payment based on an employee’s pay and length of service. An eligible employee is entitled to two weeks' pay for every year of service plus one additional week's pay. Weekly pay is capped at €600 per week for the purposes of the calculation.
The Redundancy Payments Act 1979 Act provides that, when setting a weekly pay cap for redundancy payments, the Minister must take into account any changes in the average earnings of workers in the transportable goods industries as recorded by the Central Statistics Office. Any regulations are subject to the consent of the Minister for Finance.
I acknowledge the weekly cap has not been increased since 2005. There are no immediate plans for an increase, but my officials are keeping this matter under active review. A number of factors must also be carefully balanced in any consideration of an increase to the €600 ceiling. These include the rights of employees to a reasonable redundancy payment while also taking account of the potential increased costs to some businesses. Consultation with other Government Departments, employer and employee representative groups and other relevant stakeholders would also be required.
