Tuesday, 18 December 2012

Ceisteanna (296)

Dara Murphy


296. Deputy Dara Murphy asked the Minister for Jobs, Enterprise and Innovation in view of the percentage increase in the proportion of redundancy payments that must now be borne by employers, the measures he is taking to prevent employers breaking time or making employees redundant to prevent potential redundancy liability; if there are any additional measures for employers who wish to remain trading but who cannot afford these increased lump sum redundancy payments; and if he will make a statement on the matter. [56735/12]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Jobs)

With regard to the Redundancy Payments Acts, responsibility for this legislation and, consequently, the Redundancy Payments Scheme and the payment of rebates to employers is a matter for the Minister for Social Protection.

The Department of Social Protection advise that under the Redundancy Payments Acts an eligible employee is entitled to two weeks statutory redundancy payment for every year of service, plus a bonus week. Compensation is based on the worker’s length of reckonable service and reckonable weekly remuneration, subject to a ceiling of €600 per week. Employees must have at least two years’ service to be eligible for a redundancy payment. Claims for statutory redundancy can be taken to the Employment Appeals Tribunal.

It is the responsibility of the employer to pay statutory redundancy to all its eligible employees. I understand from the Department of Social Protection that where an employer makes a statutory redundancy payment to an eligible employee made redundant before 1 January 2013, he/she is entitled to a rebate of a portion of that payment from the State. As a result of changes announced as part of Budget 2013, the employer rebate is being abolished for cases where the date of dismissal by reason of redundancy is on or after 1st January 2013. The 15% rebate will continue to be payable in respect of redundancies which occurred on or after 1st January 2012 up to 31st December 2012. Rebates to employers and lump sums paid directly to employees are paid from the Social Insurance Fund.

As regards an employer’s inability to afford to pay redundancy to his/her employees, where an employer can prove to the satisfaction of the Department of Social Protection that he/she is unable to pay the statutory redundancy to his/her employees the Department of Social Protection will make lump sum payments directly to the employees and will seek to recover the debt from the employer. The recent Budget announcement has no impact on this position. To prove inability to pay the employer must submit documentary evidence to confirm that this is the position. This evidence usually takes the form of a recent statement of affairs and a letter from the company’s accountant/solicitor to confirm that this is the position.

I understand from the Department of Social Protection that an employer may lay-off staff when he/she is unable to provide work, but she/he believes this to be a temporary situation and gives the employee notification of the lay-off before the work finishes. A lay-off can only occur if it is provided for in the employee’s contract of employment, if it is custom and practice in the workplace or if the employee agrees to the lay-off. However, if an employee has been laid-off for 4 weeks or more, or for 6 of the previous 13 weeks, he/she may give the employer a notice in writing of his/her intention to claim redundancy under the Redundancy Payments Acts 1967-2007. Accordingly, an employer cannot compulsorily lay-off an employee for an indefinite period.

There is case law in relation to lay-off being used inappropriately, forcing employees to waive their rights to notice and request redundancy. For example, the Industrial Yarns -v- Green case [1984] ILRM 15 and the Irish Leathers -v- Minister for Labour case [1986] IR 177 both concerned lay-off being mis-used by employers in order to deny employees their entitlement to pay in lieu of notice which concerned.

Employment rights legislation also contains a variety of protections in the Unfair Dismissals Acts 1977 – 2005 to protect the interests of employees who have been dismissed or made redundant or are facing dismissal or redundancy.

The purpose of the Unfair Dismissals Acts is to protect employees from being unfairly dismissed from their jobs by laying down criteria by which dismissals are judged to be unfair, by providing a system for adjudication of complaints of unfair dismissal and, where an employee has been found to have been unfairly dismissed, redress. The Acts apply to a person who has been in the continuous service of the employer for more than one year. In certain circumstances (e.g. dismissal because of pregnancy or trade union membership), the one year requirement does not apply. Under the Unfair Dismissals Acts, an employer must demonstrate that there were substantial grounds justifying a dismissal.

In general, redundancy is a situation where an employee's job no longer exists and no replacement is necessary. Where an employee has at least one year’s service, the employee may take an Unfair Dismissals case to a Rights Commissioner if the employee was made redundant in circumstances where he/she considers that a redundancy situation did not exist. The relevant complaint form is available from the Workplace Relations Customer Service website at (www.workplacerelations.ie) or, on request, from the Workplace Relations Customer Service on 1890 80 80 90.

Where a collective redundancy situation exists, an employer is obliged to engage in consultations with employee representatives over a period of at least 30 days before issuing notices of redundancy.

Also, continuity of service for an employee is, as per the provisions contained in the First Schedule of the Minimum Notice and Terms of Employment Act 1973 (as amended), generally only broken by either the dismissal of the employee or the resignation of the employee. For the purposes of the Unfair Dismissals Acts, in cases where an employee is dismissed (other than an employee on a fixed-term contract) and is then re-employed by the same employer not later than 26 weeks after the dismissal, the continuity of service of the employee is not considered to have been broken if the dismissal was wholly or partly for, or was connected with, the purpose of the avoidance of liability under the Unfair Dismissal Acts. In addition, in the case of employees who are employed on a series of short-term (fixed-term) contracts with less than a three-month gap between the contracts, the length of the contracts may be added together for the purposes of calculation of continuity of service under the Unfair Dismissals Acts if, in the opinion of the employment rights adjudication bodies, the entry by the employer into the subsequent contracts was wholly or partly for, or was connected with, the purpose of the avoidance of liability under the Unfair Dismissals Acts.