Collective Redundancies in Ireland-the Legal Position

collective-redundancies

The Protection of Employment Acts, 1977 to 2007, applies to employers who normally have more than 20 employees and must be followed by these employers when carrying out a programme of collective redundancies.

 

The acts, and various regulations, set out the procedure that must be followed by these companies.

Collective redundancies are defined in  S.I. No. 370/1996 — Protection of Employment Order 1996 as:

6. (1) For the purpose of this Act, `collective redundancies’ means dismissals effected by an employer for one or more reasons not related to the individual concerned where in any period of 30 consecutive days the number of such dismissals is —
(a) at least 5 in an establishment normally employing more than 20 and less than 50 employees,
(b) at least 10 in an establishment normally employing at least 50 but less than 100 employees,
(c) at least ten per cent. of the number of employees in an establishment normally employing at least 100 but less than 300 employees, and
(d) at least 30 in an establishment normally employing 300 or more employees.

The Protection of Employment Act, 1977 to 2007 applies to all employees, regardless of the amount of service they have.

Consultation and Notification

If a collective redundancy is to be carried out, the employer must consult employees’ representatives on

  1. The possibility of avoiding redundancies and
  2. How employees will be chosen for redundancy.

The employer must supply the employees or their representatives with all relevant information such as

  • The reason for redundancies
  • The number of employees it is proposed to make redundant
  • The number of employees normally employed
  • The time period over which it is proposed to carry out the redundancies
  • The criteria for selection of workers
  • The method of calculating and redundancy payments.

The employer must also supply this information to the Minister for Enterprise, Trade and Employment and allow at least 30 days to expire before issuing redundancy notices to employees. Failure to abide by this will leave the employer open to criminal prosecution.

The Protection of Employment (Exceptional Collective Redundancies and Related Matters) Act 2007 provides that some dismissals will be considered to be ‘exceptional collective redundancies’ if they fall into the following category:

an employee who is dismissed shall be taken not to be dismissed by reason of redundancy if—
(a) the dismissal is one of a number of dismissals that, together, constitute collective redundancies as defined in section 6 of the Protection of Employment Act 1977 ,
(b) the dismissals concerned were effected on a compulsory basis,
(c) the dismissed employees were, or are to be, replaced, at the same location or elsewhere in the State, (except where the employer has an existing operation with established terms and conditions) by—
(i) other persons who are, or are to be, directly employed by the employer, or
(ii) other persons whose services are, or are to be, provided to that employer in pursuance of other arrangements,
(d) those other persons perform, or are to perform, essentially the same functions as the dismissed employees, and
(e) the terms and conditions of employment of those other persons are, or are to be, materially inferior to those of the dismissed employees.”.

This act allows for the referring of disputes to a Redundancy Panel which can invite the parties to make submissions in relation to the proposed collective redundancies.

The Redundancy Panel will then make a decision as to whether the proposed redundancies fall within the definition of ‘exceptional collective redundancies’ or not in which case the matter is referred to the Labour Court.