Redundancy and Insolvency Overview: Employee Entitlements

Redundancy is what happens when you lose your job because your employer is either closing the business or reducing the number of staff. A redundancy occurs where your job in the company no longer exists, you are let go and are not replaced.

You may be part of a collective redundancy if your employer is making a certain number of employees redundant during any period of 30 consecutive days.

There are rules in place that employers must follow when proposing to create a collective redundancy. Further information about the obligations on employers and what this means for employees can be found on the Workplace Relations Commission website.

The Redundancy Payments Act 1967, as amended, sets out the obligations and rights of employers and employees in situations where an employee is made redundant.

All eligible employees being made redundant are entitled to a statutory redundancy payment.

Statutory redundancy is equivalent to 2 weeks’ pay for every year of service plus 1 additional bonus week, subject to a maximum of €600 per week.

Where your employer is proposing to make you redundant, you have a right to notice. You are entitled to notice of the redundancy at least two weeks before the date of dismissal. You may also be entitled to longer periods of notice under Minimum Notice and Terms of Employment Act 1973, depending on your length of service.

To qualify for a statutory redundancy payment the following conditions must be met:

• 104 weeks of continuous employment with the same employer
• employment is fully insurable under the Social Welfare Acts
• the job must no longer exist
• employee must be over 16

Further details can be found on the Department of Enterprise, Trade and Employment website.

Further information about redundancy

• Information in relation to other redundancy provisions, including details about Maternity Leave, Apprenticeships and change of ownership
• Information for employment permit holders who are made redundant
• Information about how USC affects redundancy payments

Insolvency is what happens when a company can no longer pay its debts as they fall due or when it has more liabilities than assets on its balance sheet. When a company is insolvent, a person known as a liquidator is usually appointed to help wind up the company.

If your employer is insolvent, you are likely to be made redundant. You may also be owed outstanding wages or other entitlements like holiday pay.

Further information about employers’ insolvency and what this means for employees can be found on the Department of Enterprise, Trade and Employment website.

1. Redundancy Payment Scheme

In situations where an employer is genuinely unable to pay statutory redundancy entitlements due to financial difficulties or insolvency, the Redundancy Payment Schemeprovides a safety net to ensure you receive your statutory entitlements.

Redundancy Payment Scheme calculations

You can use these links to estimate your potential statutory redundancy payment:

• Redundancy Calculator on MyWelfare.ie
• Redundancy Calculation Examples

Redundancy Payment Scheme employer repayments

Once a payment has been made by the department under the Redundancy Payment Scheme, a debt will be raised against the employer. Learn more about options available to an employer to repay this debt.

Redundancy Payment Scheme statistics

Statistics on applications received under the Redundancy Payment Scheme since 1995

2. COVID-19 Related Lay-Off Payment Scheme

The COVID-19 Related Lay-Off Payment Scheme is a once off, lump sum payment made by the State to employees who:

• have been made redundant since 13 March 2020, or are made redundant before 31 January 2025

and

• have lost the opportunity to build reckonable service due to temporary lay-offs caused by the COVID-19 restrictions from 13 March 2020 to 31 January 2022

3. Insolvency Payments Scheme

The Insolvency Payments Scheme protects the former employees of companies that have become legally insolvent.

Employees may claim, through an employer representative, such as the official liquidator or receiver, various outstanding debts including:

• Arrears of wages and sick pay
• Outstanding holiday pay
• Unpaid statutory minimum notice
• Certain arrears of pension contributions
• Various statutory awards made by the Workplace Relations Commission (WRC)

• Workplace Relations Commission
• Department of Enterprise, Trade and Employment
• Welfare Partners
• MyWelfare.ie (Redundancy Calculator)
• Revenue

Intreo (the Public Employment Service) is a single point of contact for all employment and income supports and services.

• If you have any queries about general redundancy or employment rights, you can contact the Workplace Relations Commission at their Information and Customer service section.
• If you have any queries about redundancy and insolvency policy and legislation, you can contact the Department of Enterprise, Trade and Employment.
• If you have any queries about your employer’s insolvency and what this means for you, you can contact the liquidator, receiver or employer’s representative.
• If you have any queries when applying for redundancy or insolvency payment schemes, you can contact this department at the Redundancy and Insolvency Payments Unit.