Where you lose your job due to circumstances such as the closure of the
business or a reduction in the number of staff this is known as redundancy.
Payments Acts 1967–2012 provide a minimum entitlement to a redundancy
payment for employees who have a set period of service with the employer. Not
all employees are entitled to the statutory redundancy payment, even where a
redundancy situation exists. If you do qualify for redundancy there are specific redundancy procedures which
employers and employees must follow in order to comply with the legislation.
However, you and your employer may agree a redundancy payment above the
statutory minimum, and in such circumstances, employees who have not reached
the statutory minimum period of service may also receive a payment. For
example, statutory redundancy only applies to employees with two years'
service. However, an employer might agree to pay a lump sum to employees with
less than two years' service. This payment arises through agreement and not
through a statutory entitlement. As so often in employment law, the legislation
is concerned with ensuring minimum rights, while allowing the parties to agree
more substantial rights.
Employer rebate abolition: There will be no statutory
redundancy employer rebate where the date of dismissal due to redundancy is on
or after 1 January 2013.
The statutory redundancy payment is a lump-sum payment based on the pay of
the employee. All eligible employees are entitled to:
- Two weeks' pay for every year of service over the age of 16 and
- One further week's pay
The amount of statutory redundancy is subject to a maximum earnings limit of
€600 per week (€31,200 per year).
Pay refers to your current normal weekly pay including average
regular overtime and benefits-in-kind, but before tax and PRSI deductions, that
is your gross pay.
The statutory redundancy payment is tax-free.
Reckonable and non-reckonable service
All redundancies notified after 10 April 2005 take account of absences from
work only over the last 3 years of service. Any absences outside of this 3-year
period which ends on the date of termination of employment are disregarded.
When reckoning or calculating the actual length of your service for redundancy
payment purposes, the following are regarded as reckonable service, (the
absences listed here are called reckonable absences):
- The period you were actually in work
- Any absence from work due to holidays
- Any absence from work due to illness (see below for non-reckonable
periods of illness)
- Any period where you were absent from work by agreement with your
employer (typically career break)
- Any period of basic and additional maternity leave allowed under the
- Any period of basic adoptive/parental/carer's leave
- Any period of lock-out from your employment
- Any period where the continuity of your employment is preserved under the
Unfair Dismissals Acts.
However, in making the calculation of the length of your service, the
following periods over the last 3 years will not be taken into account as
service, (these are called non-reckonable absences):
- 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
- Any period on strike
- Any period of lay off from work.
You can use this online
redundancy calculator to help you to calculate your statutory redundancy
entitlement. You should note that the online redundancy calculator does not
purport to give a legal entitlement to any statutory redundancy amount.
Reduced hours and short-time work
If you were made redundant within a year of being
put on reduced hours or pay, your redundancy payment would be based on your
earnings for a full week. If you are made redundant after working reduced hours
for more than a year, how your payment will be calculated depends on whether
you accepted being on reduced hours or not. If you fully accepted the reduced
working hours as your normal week and never asked to return to full-time work,
then your redundancy payment will be based on your gross pay for the reduced
working hours. If, on the other hand, you never accepted the reduced working
hours as your normal hours and continually asked to be put back on full-time
working, your payment would be based on your normal weekly earnings.
If you have been put on short time and
then are made redundant your redundancy payment may be based on your pay for a
If you have a dispute about this with your employer you could make a claim
to the Employment Appeals Tribunal.
Taxation of lump sums
If you receive a lump sum in compensation for the loss of employment, part
of it may be tax-free. The statutory redundancy lump sum is always tax-free.
Read more about taxation
of lump-sum payments on redundancy/retirement. The Revenue Commissioners
have published a leaflet on taxation
In the first instance it is up to the employer to pay the statutory
redundancy lump sum to all eligible employees. However, where the employer is
unable to pay or refuses or fails to pay, the employee can apply for direct
payment from the Social Insurance Fund - see 'How to apply' below.
Where your employment has been terminated due to the insolvency of your
employer legislation provides for the payment of certain outstanding
entitlements in relation to your pay. Under the Insolvency Payments Scheme
these may be paid by the Department of Social Protection out of the Social
Insurance Fund. There are more details about employers' insolvency legislation
in 'Further information' below.
Since 1 January 2005 the maximum earnings taken into account in the
calculation of statutory redundancy lump sum payments are €600 per week
(€31,200 per year).
How to apply
On the date of the termination of employment your employer should pay the
redundancy lump sum due to you.
If your employer has not paid your redundancy lump sum, you should apply to
your employer for it using form RP77
(pdf). If your employer still refuses to pay it, you can apply to the
Department of Social Protection for direct payment from the Social Insurance
Fund. This must be done online using
form RP50 as follows:
- If your employer is unable to pay your redundancy lump sum, he should
sign the RP50.They should also submit a letter from an accountant or
solicitor stating they are unable to pay and accepting liability for 100%
of the lump sum (85% for a dismissal in 2012) owing to the Social Insurance
Fund. Documentary evidence such as audited accounts should also be
- If your employer refuses to pay your redundancy lump sum or if there is a
dispute about redundancy you can bring a claim to the Employment
Appeals Tribunal. You must use the new online complaint form (available
by selecting ‘Make a complaint in relation to employment rights’ on workplacerelations.ie).
This must be done within one year of your dismissal. To apply for your lump
sum you should send a completed form RP50 together with a favourable
decision from the Employment Appeals Tribunal
Insolvency: If the company has been liquidated or is in
receivership, the completed form RP50 should be sent in by the liquidator or
receiver on behalf of the employees.
You can read a
list of frequently asked questions about redundancy.
For further information about the Redundancy Payments Scheme contact
Workplace Relations Customer Services. For information on the status of a claim
for a redundancy lump sum or rebate which has been submitted for payment you
can contact the Redundancy Payments section directly - see 'Where to apply
Where to apply
The application for payment from the Social Insurance Fund should be sent
Redundancy Payments Section
Department of Social Protection
Floor 2, Block C
The Earlsfort Centre
Lower Hatch Street
Locall:1890 800 699
For further information about the Redundancy Payments Scheme contact:
Workplace Relations Customer Services
Department of Jobs, Enterprise and Innovation
Opening Hours: Mon. to Fri. 9.30am to 5pm
Tel: (059) 917 8990
Locall: 1890 80 80 90
Employers' insolvency legislation
The Protection of Employees (Employers' Insolvency) Acts 1984–2012 protect
certain outstanding entitlements relating to the pay of employees in the event
of their employers becoming insolvent as defined in the Acts.
Subject to certain limits and conditions (including statutory time limits),
money due to employees in a range of situations may be paid by the Department
of Social Protection out of the Social Insurance Fund. Instances where the
Department may pay from this fund include circumstances where money due as a
- Arrears of pay (including arrears of pay due under an Employment
- Holiday and sick pay
- Entitlements under the minimum notice and terms of employment, employment
equality and unfair dismissals legislation
- Court orders in respect of wages, holiday pay or damages at common law
for wrongful dismissal.
The Insolvency Payments Scheme also protects employees' outstanding
contributions to occupational pension schemes which an employer may have
deducted from wages but not paid into the schemes. Unpaid contributions to an
occupational pension scheme on an employer's own account may also be paid from
the Fund, subject to certain limits. The Scheme applies to outstanding pension
contributions for up to a year prior to the date of insolvency.
The Scheme covers employees who are over 16 years of age and are in
employment which is insurable for all benefits under the Social Welfare Acts
and includes those over 66 years of age who are in employment which, but for
their age, would be insurable for all benefits under the Social Welfare Acts.
Employees should claim from the employer representative (usually the
liquidator or receiver) for payment of outstanding entitlements. The employer
representative can claim an
insolvency payment online.
Disputes regarding most entitlements under the Acts may be referred to the
Appeals Tribunal. You can apply using the complaint
There is further information in the Employee
Guide to the Insolvency Payments Scheme.
Implementation of Directive 2002/74/EC
Communities (Protection of Employees (Employers' Insolvency) Regulations SI
630/2005 amend the Protection of Employees (Employers' Insolvency) Act 1984
by including a provision to cover employees who are employed by an employer who
has become insolvent under the laws, regulations and administrative procedures
of another member state. The Regulations apply to insolvencies occurring from 8