Redundancy and Severance Pay Advice
Given the high volume of redundancies announced by global tech companies this week in Ireland, such as Meta, Twitter and Stripe, it can be a period of shock and upset for those employees affected.
It can also be quite daunting as regards employees’ rights and entitlements. It’s important to be aware that many employers will fund the employee’s legal costs to an industry fee range, to enable that employee access independent legal advice and to go through in detail the redundancy/severance agreement.
If you have been made redundant, advised your role is at risk, or if you have been approached to consider voluntarily departing your role, J.O.S Solicitors can assist you in ensuring your best interests are protected and entitlement safeguarded.
What is a severance package?
The Redundancy Payments Act of 1967-1991 defines the minimum entitlement to a redundancy payment based on the number of week’s service with your employer (two years).
Therefore at a minimum, if you have completed at least two years’ services, redundancy will be paid as a statutory severance payment, which is calculated as two week’s pay for every year of service, and one further week’s pay. This is tax-free but is capped at €600 per week.
Your employer may, however, agree to pay you more than just the statutory amount, either in the form of a lump sum, or ex-gratis payment which again has to be paid in most tax efficient manner, meaning a portion may be tax free.
When calculating your total length of service, there may be an adjustment made for absences from work, but this only applies to time off work in the last three years and should only reflect non-reckonable service, including:
- Any period over 52 consecutive weeks where you were off work due to an injury at work
- Any period over 26 consecutive weeks where you were off work due to illness
- Any period on strike
- Any period of lay off from work
What is voluntary severance pay?
Voluntary severance pay differs from redundancy pay, in that it reflects compensation for voluntarily leaving your position i.e. it is mutually agreed between you and your employer. Some employers rather than impose redundancy on some members of staff, may simply ask for volunteers to leave their employment and be offered a financial incentive.
J.O.S Solicitors is an award winning law firm that specialises in employment law for both business and individuals. We understand the emotional impact of redundancy and the uncertainty for those affected, therefore we approach each case in a sensitive and tailored fashion, to protect your legal rights and entitlements. Equally, we provide the requisite guidance and advice to employers, who may have to make staff redundant and ensure they comply with legal requirements.
If you would like J.O.S Solicitors to assist or to simply discuss your options relating to Redundancy and Severance matters, then please contact us.