Independent Information on Redundancy in Ireland

Text Box: Glossary of Redundancy Terms

Reckonable Service 
Service to be taken into account in calculating statutory redundancy entitlement

Non-Reckonable Service 
Service to be excluded in calculating statutory redundancy entitlement; In respect of redundancies notified/declared on or after 10th April, 2005, non-reckonable service applies only to the last 3 years of employment. Any service before that 3 year period is fully reckonable.

Continuity of Employment 
Employment must be continuous for redundancy entitlement purposes e.g. if an employee himself/herself resigns from the job, they are breaking their own service.

Ex-Gratia Payment 
Also known as extra-statutory redundancy: This is payment above and beyond the minimum statutory redundancy lump sum entitlement. The employer is not legally bound to pay this extra-statutory amount under the Redundancy Payments Acts, 1967 to 2003.

A temporary absence from employment where the services of an employee are not required because of lack of work

A temporary reduction in weekly earnings to less than half the normal weekly earnings or a reduction in the hours worked to less than half the normal weekly working hours e.g. a 2 day week

Reduced Working Hours  
A temporary reduction in working hours to at least half the working week; e.g. a 3 day week or a 4 day week.

Employee Lump Sum 
The statutory redundancy lump sum owed to an employee – where the employer fails to pay, the Department pays it from the Social Insurance Fund and endeavours to recover the amount from the employer

Employer Rebate 
The 60% rebate due to the employer who pays the employee their correct statutory redundancy lump sum

A worker on a fixed wage or salary   This is the work pattern in most cases.

A worker whose pay depends on the amount of work he/she carries out i.e. paid wholly or partly by piece rates, bonuses or commissions related to his/her output. 

A worker who is employed on shift work and whose pay varies according to the shift on which he/she works will be taken to be an employee who is paid wholly or partly by piece-rates.

Employees with No Normal Working Hours 
Employees other than the three categories above. Where such an employee has no normal working hours, his/her average weekly pay will be this pay including any bonus, pay allowance or commission over the period of 52 weeks during which he/she was working before the date of declaration of redundancy.

Where an employee is normally expected to work overtime, his/her average weekly overtime earnings will be taken into account in determining his/her normal weeks pay. The formula for calculating this amount is simply to establish the total amount of overtime earnings in the period of 26 weeks ending 13 weeks before the date he/she was declared redundant and dividing that amount by 26.

“Ceiling” on wages 
The upper limit on earnings which are taken into account for redundancy calculation purposes. The ceiling has been set at €600 per week for redundancies notified/declared on or after 1st January, 2005 (€507.90 per week before that date).

Employment Appeals Tribunal (EAT) 
Independent body set up in 1968 to provide a speedy fair, inexpensive means for resolving disputes relating to redundancy matters. It has since expanded to cover many other areas of employment rights such as unfair dismissals, minimum notice etc.

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