A recent case involving a large Irish employer allegedly rushing lay-offs to avoid statutory redundancy payments highlights why timing tactics backfire. This article examines why statutory redundancy in Ireland cannot be sidestepped, and the real WRC exposure employers face when they try Read more
Statutory redundancy in Ireland comes with clear financial obligations, and some employers try to sidestep them by accelerating the timeline. A recent Irish Times investigation described allegations that a large Dublin-based contractor rushed through lay-offs of more than a third of its headquarters workforce, with affected staff claiming the timing was designed to terminate them before they reached the 104-week continuous service threshold that triggers statutory redundancy entitlements.
Employees with at least two years of continuous service are entitled to a statutory redundancy payment under the Redundancy Payments Acts 1967-2014. The minimum payment is two weeks’ pay per year of service, plus one bonus week, capped at a gross weekly ceiling of €600. Employers who rush terminations to avoid this threshold face serious legal and financial exposure if the WRC finds the redundancy was not genuine or was improperly timed.
The logic is straightforward. An employee with 103 weeks of service costs the employer nothing in statutory redundancy. An employee with 105 weeks could be owed several thousand euro. When an employer is planning a restructuring that will affect multiple staff, the temptation to accelerate can be significant, particularly if a group of employees are all approaching the two-year mark around the same time.
The case reported this week involved allegations that a large employer cut jobs rapidly, with staff claiming the pace was deliberate. Whether or not those specific allegations are upheld, the pattern is one we encounter regularly when advising employers. The instinct to move quickly and avoid statutory obligations is understandable from a cost perspective, but it almost always creates bigger problems than it solves.
The Workplace Relations Commission does not assess redundancy in isolation. Adjudication officers look at the entire picture: the business rationale, the consultation process, the selection criteria, and yes, the timing. When an employer terminates a group of employees just weeks before they would qualify for statutory redundancy, the WRC will scrutinise whether the redundancy was genuine or whether it was engineered to avoid payment obligations.
If the WRC concludes that a dismissal was not a genuine redundancy, it becomes an unfair dismissal. Under the Unfair Dismissals Acts 1977-2015, compensation for unfair dismissal can be up to two years’ remuneration. That is significantly more expensive than the statutory redundancy payment the employer was trying to avoid.
In our experience advising employers across Ireland, the WRC pays close attention to clusters of terminations that fall suspiciously close to statutory thresholds. A single case might not raise flags on its own. Ten employees all terminated within days of their two-year anniversary will prompt serious questions.
Under the Redundancy Payments Acts 1967-2014, an employee qualifies for statutory redundancy when they have completed 104 weeks of continuous service with the same employer. The payment calculation is relatively simple on paper: two weeks’ gross pay for each year of service, plus one additional bonus week, all subject to a weekly ceiling of €600.
For a long-serving employee, those figures add up quickly. An employee on a salary of €40,000 with eight years’ service, for example, would be entitled to a lump sum that runs into several thousand euro. Multiply that across a group of affected employees and the total exposure for the employer becomes substantial.
This is exactly why some employers try to terminate before the 104-week mark. The problem is that the law was written with this scenario in mind. The concept of “continuous service” has its own rules, and breaks in service, temporary lay-offs, and re-engagement all affect the calculation in ways that can catch employers off guard. Our employment advice team regularly reviews service records for employers planning restructurings, because getting the calculation wrong at this stage is where costly mistakes begin.
Accelerating a redundancy programme creates risk on multiple fronts, not just one. Here is what we see go wrong most often.
Genuine redundancy requires meaningful consultation with affected employees. The WRC expects employers to inform staff about the business reasons for the restructuring, consider alternatives to redundancy, and allow employees time to respond. When an employer is in a hurry, consultation tends to be compressed into a single meeting, or skipped entirely. This alone can be enough for the WRC to question whether the process was genuine.
Where 20 or more employees are being made redundant within a 30-day period, the Protection of Employment Acts 1977-2007 require the employer to notify the Minister for Enterprise and to consult with employee representatives at least 30 days before the first dismissal takes effect. Failing to do this is a criminal offence, not merely a civil liability.
Fair selection criteria are a hallmark of genuine redundancy. Employers who rush tend to rely on vague justifications or simply select whoever is most convenient to let go. The WRC will ask: how were roles selected for redundancy? Was there a scoring matrix? Were alternatives considered? If the employer cannot answer these questions convincingly, the dismissal looks engineered.
A situation we see frequently is employers who make redundancy decisions verbally and only produce paperwork after the fact, sometimes months later when a WRC complaint arrives. Rushed processes generate weak paper trails because there was no time to document decision-making properly. At the WRC, an employer with no contemporaneous records is already on the back foot.
This is where having ongoing HR support in place before a restructuring begins makes a measurable difference. When we manage a redundancy process for clients, every stage is documented in real time: the business rationale, the consultation meetings, the selection criteria, the individual notification letters, and the payment calculations.
Consider the employer who terminates five employees two weeks before they reach 104 weeks of service, avoiding an estimated €30,000 in combined statutory redundancy payments. If even one of those employees successfully claims unfair dismissal, the WRC can award up to two years’ remuneration. For an employee earning €35,000, that is up to €70,000 in compensation from a single claim.
The saving the employer thought they achieved by rushing is wiped out many times over by a single adverse WRC adjudication. Add in the management time consumed by the WRC process, potential legal costs, and the reputational impact of a published decision, and the true cost of the shortcut becomes clear.
There is also the collective redundancy angle. If the rushed process triggers the collective redundancy notification requirements under the Protection of Employment Acts and the employer fails to notify the Minister, that is a separate exposure with potential criminal sanctions. The fines and penalties for non-notification exist precisely because legislators anticipated this type of behaviour.
Some employers assume they can break an employee’s continuity of service through a temporary lay-off, a contract break, or by transferring the employee to a different entity. In most cases, these tactics fail. The Redundancy Payments Acts contain detailed provisions on what constitutes continuous service, and many of the common “workarounds” do not actually reset the clock.
Transfers of undertaking under TUPE regulations, for instance, preserve continuity of service automatically. An employee who transfers from one employer to another as part of a business transfer carries their service history with them. Agency workers and fixed-term contract workers also have protections that can surprise employers who assume these arrangements are outside the scope of redundancy law.
When we guide clients through restructuring at Purpletree, the first step is always a detailed audit of each affected employee’s service record, contract status, and entitlements. The TUPE service our team provides includes this analysis as standard, because the interaction between business transfers and redundancy entitlements catches employers out more often than any other single issue.
A well-run redundancy process protects the employer as much as the employee. Purpletree’s team manages every phase of the process, from the initial business rationale through to final payments and WRC-ready documentation. Our employment advice service ensures that consultation obligations are met, selection criteria are defensible, and the timeline is realistic rather than reactive.
The goal is straightforward: a redundancy process that the WRC would consider fair and genuine, with documentation to prove it. That is far less expensive than the alternative.
Contact Purpletree if you are planning a restructuring, or if you need to review whether your current redundancy process would withstand WRC scrutiny.
An employee must have at least 104 weeks (two years) of continuous service with the same employer and be aged 16 or over. They must also be in employment that is insurable under the Social Welfare Acts (i.e. paying PRSI contributions).
The employee can bring a claim to the Workplace Relations Commission. If the WRC finds the dismissal was not a genuine redundancy but was timed to avoid statutory payments, it may be treated as an unfair dismissal, which carries compensation of up to two years’ remuneration.
Yes. The WRC expects meaningful consultation, which includes informing the employee of the business rationale, exploring alternatives, and giving them time to respond. For collective redundancies (20 or more employees within 30 days), there are additional statutory notification and consultation requirements under the Protection of Employment Acts 1977-2007.
In most cases, no. The Redundancy Payments Acts contain specific rules on what constitutes continuous service, and many types of breaks, including temporary lay-offs and certain contract interruptions, do not reset the clock. Employers should take professional advice before assuming any arrangement breaks continuity.
This article is for general informational purposes only and does not constitute legal advice. Employment law is complex and fact-specific. For advice on your specific situation, contact the Purpletree HR team directly.
Our team of HR specialists advises Irish employers on exactly these issues every day. Get in touch for a confidential conversation.
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