The purpose of the redundancy payments scheme is to compensate employees, under the Redundancy Payments Act 1967, as amended, for the loss of their jobs by reason of redundancy. Under the scheme, an eligible employee is entitled to two weeks’ pay for every year of service, plus a bonus week, subject to a gross weekly salary ceiling of €600.
In order to be eligible for a statutory redundancy payment, an employee must: have at least two years continuous service; be in employment which is insurable under the Social Welfare Acts; be over the age of 16; and have been made redundant as a result of a genuine redundancy situation meaning that the job no longer exists and he/she is not replaced.
It is the employer’s responsibility to pay statutory redundancy payments in the first instance. Where an employer can prove to the satisfaction of the Department that it is unable to pay statutory redundancy to its eligible employees the Department will make statutory redundancy payments directly to those employees. Payments are made from the Social Insurance Fund. Such payments raise a debt against the employer which the Department will seek to recover.
Any proposed changes in this area would have to be considered in the overall policy and budgetary context.