Notice and Severance
Notice Requirement
Both employees and employers are obliged to give notice in the case of termination of employment under the Minimum Notice and Terms of Employment Act. Employees who have been in continuous employment for at least 13 weeks are obliged to provide their employer with one week’s notice of termination of employment. If a greater amount of notice is specified in the employee’s contract of employment, then this notice must be given. Employers must give employees termination notice depending on the length of the employee’s service as follows:
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Thirteen weeks to two years (One Week)
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Two to five years (Two Weeks)
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Five to ten years (Four Weeks)
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Ten to fifteen years (Six Weeks)
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More than fifteen years (Eight Weeks)
If the employer does not require the employee to work out any part of their notice, the employer is obliged to pay the employee for that period. No notice is required if the employment contract is terminated by either party on grounds of misconduct.
A dismissal is considered unfair if an employer has terminated the employment without serving a notice (although fair grounds for dismissal existed) or with notice (in the absence of fair grounds for dismissal). The fair grounds for dismissal relate to the capability, capacity/competence, qualifications, conduct, redundancy, contravention of law and other substantial grounds. If a dismissal is based on following reasons, it is considered unfair: membership or proposed membership of a trade union or engaging in trade union activities; religious or political opinions; legal proceedings against an employer where an employee is a party or a witness; race, colour, sexual orientation, age or membership of the Traveler community; pregnancy, giving birth or breastfeeding or any matters connected with pregnancy or birth; availing of rights under legislation such as maternity leave, adoptive leave, carer's leave, parental or force majeure leave; and unfair selection for redundancy.
The Unfair Dismissals Act 1977 was amended in 2015 so as to provide that the dismissal of a worker for having made a "protected disclosure" is automatically unfair. Moreover, the ceiling on compensation in respect of such unfair dismissal is increased from two to five years of remuneration.
Source: §4-8 of the Minimum Notice and Terms of Employment Act
Severance Pay
Employers are not required to provide severance pay for employees who are terminated. Nevertheless, there are circumstances where an employer might want to pay an employee a severance payment, e.g., when they may have the commercial advantages of reducing the risks of unfair dismissal claims. A waiver and discharge agreement should be signed by an employee who is in receipt of a severance payment.
In cases when someone loses a job due to circumstances such as the closure of the business or a reduction in the number of staff, this is known as redundancy. Generally, a redundancy situation arises if your job ceases to exist and you are not replaced. The Redundancy Payments Acts 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 this statutory redundancy payment, even where a redundancy situation exists. Workers aged 16 or over with 104 weeks’ (2 years) continuous service with an employer are entitled to a statutory redundancy payment. 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 (bonus week)
The amount of statutory redundancy is subject to a maximum earnings limit. A worker with 5 years of service is eligible for 11 weeks (10 weeks + 1 bonus week) of tax-free statutory redundancy pay.
The 2024 amendments to the Protection of Employment Act are important in insolvency settings because they extend those duties to a “responsible person”, such as a liquidator, receiver or other court-appointed manager, where applicable.
Source: §11 of the Redundancy Payments Acts of 1967-2007; Section 2, 9-14, 20 and of the Employment (Collective Redundancy and Miscellaneous Provisions) and Companies Amended Act of 2024
