Redundancy Rebate Reduced From 1 January 2012

Author:Ms Melanie Crowley
Profession:Mason Hayes & Curran
 
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Employers who are currently considering implementing a redundancy exercise should consider the implications of waiting until next year to do this. Budget 2012 provides that the employer rebate on statutory redundancy payments will be reduced from the current rate of 60% to 15% with effect from 1 January 2012. This will make redundancies a much more costly exercise for employers from the start of next year. Employers implementing redundancies need to ensure that they comply with the Redundancy Payment Acts 1967-2007 and that the redundancy process which is carried out is fair in order to minimize the risk of, and to defend, claims. This normally involves engaging in consultation with employees, carrying out a fair selection process and considering alternatives to redundancy. There are additional requirements for collective redundancies (i.e. where a certain minimum number of employees are made redundant within a 30 day period with the numbers depending on the size of the workforce). These requirements include issuing a notification to the Minister for Jobs, Enterprise and Innovation and carrying out a 30 day consultation period with employee representatives. Given that the rebate reduction will take effect from 1...

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