A collective redundancy arises when the employer intends to make redundant the roles of a large number of employees. This can arise where the business is shutting down or where the employer has decided to carry on with a reduced number of employees. Unfortunately, given the pandemic-related stresses on businesses, we can expect to see more collective redundancies as businesses succumb to the pressures.
Special procedures must be followed where there are 5 or more redundancies in a workplace with 21 or more employee, 10 redundancies in a workplace of 50 or more employees, 10% of employees being made redundant in a workplace with between 100 and 299 employees or 30 or more redundancies in workplaces with 300 or more employees.
The employer has different obligations than where an individual redundancy arises. As well as using fair selection criteria, the employer must take the following steps.
- Notify the Minster for Enterprise, Trade and Employment within 30 days of the first redundancy. It is advisable to make the notification as early as possible, as there are fines for failure to comply
- Notify the employees and begin a 30 day consultation period, prior to the first redundancy. It will be important to either consult with unions, staff associations or if there are none in the workplace to call an election for employees to elect representatives. The representatives can make suggestions and put forward ideas. The employer must give proper consideration to the proposals, but is not obliged to accept them.
- Fair procedures, and objective, non- discriminatory criteria must be utilised in selecting employees to be made redundant and employees on protective leave (eg maternity or adoptive leave) may not be dismissed until after their return to work. Special care must be taken in relation to employees on sick leave, although they can be made redundant if fairly selected.
- The employer must allow employees selected for redundancy, time off work to attend at interviews or training.
- The employer must consult with the employee representatives in relation to payment packages. Ex gratia payments will provide an incentive for employees to stay until the employer ceases operations and can provide consideration in a waiver in relation to legal actions. The very minimum that must be paid is the statutory entitlement, for each employee that has been employed for 104 weeks or more. Employment contracts or collective agreements may require ex gratia payments over and above the statutory minimum.
Failure to follow the procedure can leave the employer open to actions for unfair dismissal actions, employment equality actions, redundancy related claims, and fines.
This article is for information purposes only, and is not intended to be relied upon as legal advice. Fitzsimons Redmond will be happy to tailor advice to suit the needs of your organisation, and work with you to develop an appropriate strategy to deal with collective redundancies. You can contact us on 01 6763257.
By Lisa Quinn O’Flaherty
Solicitor at Fitzsimons Redmond